(Alliance News) - Nanoco Group PLC on Wednesday said Merck Gmbh intends to negotiate a new supply and licencing agreement and has issued a three month notice of termination of the current licence during renegotiations.
The original 2016 licence was renewed automatically every year, and included "escalating minimum annual royalties that were payable unless terminated". Nanoco - which makes cadmium-free quantum dots and other nanomaterials - said it and drugmaker Merck are pursuing "mutually acceptable agreement".
While renegotiation is ongoing, Merck is still placing purchase orders with Nanoco for small-scale research and development services and cadmium-free quantum dots product.
The minimum EUR500,000 annual licence fee for the contract year ending June 30 will still be payable. No previously predicted cash or income have been lost as a result of Merck's decision.
Nanoco is assessing its strategic options, including a formal sale process for the company, as disclosed on November 5.
Chief Executive Michael Edelman said: "We continue to work collaboratively with Merck and we had based our plans and forecasts on the risk of this renegotiation occurring. While we continue to actively engage with Merck to find a new basis for long term co-operation we will continue to supply them with paid for R&D services and [cadmium-free quantum dots] product."
Shares in Nanoco were down 15% at 8.31 pence in London on Thursday afternoon.
By Anna Farley; annafarley@alliancenews.com
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Nanoco (NANO)