MERRION Pharmaceuticals, an Irish drug company that was spun out of Elan two years ago, will this week begin a fundraising roadshow in Dublin to help pay for the development of four cancer drugs. The company is also expected to seek a stock market flotation on secondary markets in Dublin and London within 12 months.

The pharma group has hired Goodbody stockbrokers to act as its adviser and broker and is seeking to raise funds from private and institutional investors. It is understood that the drugs will cost €10m each to develop.

Based in Trinity College, Merrion was one of a number of subsidiaries sold by Elan in recent years as it restructured its global operations. The others included Amarin, which is listed on Nasdaq, and AGI Therapeutics, which last week listed in Dublin and London. A number of former Elan staff still work for the company.

Merrion is developing two key products in multi-billion euro markets. One treats bone cancer and the other prostate cancer. Both are expected to enter phase three human clinical trials in 2007. It is developing oral versions of drugs that can only be injected at present.

The company is headed by Michael McKenna, who is based in America, has 30 years experience and has brought eight drugs to market. He is supported by the chief operating officer, John Lynch, who held senior positions with Abbott, Ernst & Young and Bayer Diagnostics; and Thomas Leonard, the chief scientific officer, who has held held management positions with Wyeth-Ayerst, aaiPharma, and Endeavor Pharmaceuticals.

The most recent addition to the management team was Jonathan O’Connell, who has joined as chief financial officer. O’Connell was CFO of Trinity Biotech when it floated on the Nasdaq and the Irish Stock Exchange. He held the same position with Spectel, which pulled a flotation in 2001 before being sold to Avaya in 2004 for more than $100m.

Elan will enjoy a windfall from any Merrion success. Part of the sale agreement includes a stipulation that it receive royalties and a licence fee.

The Dublin investment community is showing a healthy appetite for pharmaceutical companies. AGI last week rose 10% on its first day trading on the London Alternative Investment Market and Dublin’s IEX, valuing the firm at more than €100m. Another Elan spin-off, Azur Pharma, last year raised more than €20m from clients of Davy Stockbrokers.