FoxHollow Technologies Sells Stake to Merck

FoxHollow Technologies, a medical device manufacturer, has sold an 11% stake in its business to collaboration partner and drug developer, Merck & Co. of Whitehouse, NJ, according to the Associated Press.
   Merck is buying $95 million worth of FoxHollow stock while investing an additional $100 million in the company during a four-year period to expand its collaboration agreement.
   Specifically, Merck will pay $40 million to the Redwood City, CA-based medical device maker over four years to collaborate exclusively in specified disease areas. Merck will pay Foxhollow $10 million per year, if the agreement is extended.
   The news boosted shares of FoxHollow rose $4.84, or 18 percent, to $32.09 in morning trading on the Nasdaq, as trading volume jumped to more than seven times the average level.
   Also, Merck will pay minimum of $60 million over the first three years of the agreement for research on removal of atherosclerotic plaque from arteries for analysis, clinical trials and drug profiling. FoxHollow will conduct the research activities and receive milestone and royalties on developed products.