Merrion Pharmaceuticals, a Dublin-listed company backed by investors including Declan Ryan, has abandoned its plan to morph into an investment vehicle and instead will be liquidated and its cash returned to shareholders.

Merrion last November sold the bulk of its assets, comprising licensing arrangements for technology to help develop a pill to treat diabetes, to Danish company Novo Nordisk for $3 million (it reports in US dollars).

At that time, it also announced it would repay a $6 million loan to Mr Ryan, keeping the rest of its cash available to invest in healthcare businesses.

“Since [the sale to Novo] the Merrion board has reviewed a number of investment proposals, none of which were deemed sufficiently compelling to recommend to shareholders,” said Merrion yesterday in a note to shareholders.

It said the board had decided to wind the company up and return about $4.5 million to shareholders, subject to passing a motion at an extraordinary general meeting.

"The proposed liquidation would involve the cancellation of the company's listing on the Irish Stock Exchange and both the proposed liquidation and the cancellation of the listing would require the approval of Merrion shareholders," it confirmed.

Merrion previously specialised in developing oral forms of drugs that were previously administered by injection. Novo was a major customer of Merrion, which rationalised in 2012 and licensed its technology to the Danish outfit.

The sale of the technology to Novo last year left Merrion effectively operating as an investment shell.

Shareholders will be soon receive notification of the date for an EGM to wind up the business, it said.