STOCKHOLM -(Dow Jones)- Danish vaccine manufacturer ALK-Abello A/S (ALK-B.KO) said Wednesday it has signed a deal with Schering-Plough Corp. (SGP) of the U.S. to develop its tablet-based allergy vaccines for North America, sending shares up as much as 17% in early trading.
At 0858 GMT , ALK-Abello shares were up 6.6% at DKK1,544 while the broader Copenhagen market was down 0.1%. The stock had earlier traded as high as DKK , 690.
Under the agreement, ALK-Abello will receive an upfront payment of $35 million from Schering-Plough . Milestone payments to the Danish company could reach as much as $255 million . In return, Schering-Plough will gain exclusive rights to develop, market and distribute tablet-based vaccines against grass pollen, house dust mites and ragweed allergies in the U.S., Canada and Mexico .
" It seems like a fair deal," said Sydbank analyst Lars Villadsen. " ALK was looking for a partner with good market coverage and they have got that with the deal." Villadsen has a neutral rating on ALK-Abello.
The Danish vaccine manufacturer will be entitled to royalty payments on net sales of the products in the North American market. Schering-Plough will be responsible for all costs of clinical development, registration, mark eting and sales of the products on the North American market.
ALK-Abello, which is among the world' s leading providers of vaccines against allergies, reported net profit of DKK44 million on sales of DKK1.49 billion in the financial year ending Aug. 31 .
An estimated 150 million people around the world suffer from allergies but only 5% use vaccines, because the treatment can require up to 100 shots by a doctor or nurse over a three- to five-year period. ALK-Abello' s vaccine is produced as a tablet which is absorbed under the tongue, in an attempt by the company to broaden the market for allergy vaccines.
The World Allergy Organization estimates that, worldwide, $20 billion is spent a year because of allergies, including medications, time-off work and doctor' s visits. Financial analysts figure that between $10 billion and $12 billion is spent annually to treat allergies, but only a small fraction goes to allergy vaccines.
Company Web site: http://www.alk-abello.com
-By Ian Edmondson, Dow Jones Newswires; +46-8-5451-3094; ian.edmondson@ dowjones.com
Corrected Jan. 3, 2007 5:55 ET ( 1055 GMT )
Danish vaccine manufacturer ALK-Abello A/S (ALK-B.KO) said Wednesday it has signed a deal with Schering-Plough Corp. (SGP) of the U.S. to develop its tablet-based allergy vaccines for North America, sending shares up as much as 17% in early trading.
(In " =UPDATE: ALK-Abello Soars On Deal With Shering-Plough," published at 0950 GMT, Schering-Plough' s name was misspelled in the headline.) (END) Dow Jones Newswires 01-03-07 0450ET Copyright (c) 200 7 Dow Jones & Company, Inc. 
