A view of the Merck & Co. campus in Linden, New Jersey
Drug giant Merck agrees to pay $950 million to settle a criminal case and civil claims over its Vioxx painkiller. Reuters

Merck & Co. Inc. said it agreed to acquire privately-held diabetes treatment developer SmartCells Inc. in a deal that could exceed $500 million if development and regulatory milestones are met.

Under the terms of the deal, SmartCells shareholders will receive an upfront cash payment and be eligible to receive clinical development and regulatory milestones for products resulting from the transaction.

SmartCells is developing SmartInsulin, a once-a-day self regulating, injectable formulation to treat diabetes. SmartInsulin, currently in pre-clinical trials, has the potential to reduce the incidence of hypoglycemia (low blood sugar) and improve control over both fasting and post meal glucose levels.

According to SmartCells, proof-of-concept studies have shown safe control of blood glucose levels and rapid, reversible response to glucose challenges. SmartInsulin makes use of a polymer-based dosing technology, making it possible to auto-regulate the release of a therapetic based on a the plasma concentration of a molecular indicator.

SmartInsulin only releases insulin in response to glucose levels. When a person’s glucose level is low, SmartInsulin stays inactive. But when glucose crosses a certain threshold, the insulin becomes available to work.

Through the acquisition of SmartCells we have obtained innovative technology that may enable us to develop glucose-responsive insulins, said Nancy Thornberry, senior vice president and head, diabetes and obesity franchise, Merck Research Laboratories.

If this investigational technology is ultimately approved for use with patients, it could provide an important new therapy for the treatment of diabetes, Thornberry said.

The technology developed by SmartCells could have broad applications for thyroid and growth-hormone deficiencies, and infertility.

According to a data from the American Diabetes Association, 23.6 million children and adults in the United States — 7.8 percent of the population — have diabetes.

Shares of Merck are trading at $35.09, up 0.09 percent, in early trade Thursday on the NYSE.

Nyse Medicine