Alizyme issues warning about its financial position

Alizyme Plc has told investors that there is a “material uncertainty” about whether it will receive milestone payments for one of its drug development programmes. Barring additional funding, it would therefore be unable to continue as a going concern.

The London Stock Exchange-listed company issued the trading update on 29 June 2009.

“The Company does not now expect to have sufficient funding to last beyond the end of August 2009 and will be unable to continue as a going concern without the raising of additional funds. The Company is in discussions with its advisers in relation to such funding. In the absence of additional funds, the Company may face going into administration or liquidation,” the statement said.

Alizyme has two partnered products in clinical development for which it had expected to receive potential milestone payments of as much as £100 million. These include Cetilistat, a gastrointestinal lipase inhibitor for treating obesity and Type 2 diabetes, and Colal-Pred, a colonic delivery system for treating ulcerative colitis with an approved generic steroid (prednisolone sodium metasulfobenzoate).

Cetilistat is in Phase 3 development in Japan with Alizyme’s partner, Takeda Pharmaceutical Company Ltd. Colal-Pred has completed a European Phase 3 trial in partnership with Norgine BV. It is also partnered with Prometheus Laboratories Inc in North America in a Phase 2 study and with TSD Japan Inc in Japan for a Phase 1 study.

In March 2009 Alizyme’s chief executive officer, Tim McCarthy, said that he was confident that milestone payments relating to the development programmes would be received within 12 months.

But on 29 June, the company said that as a result of “potential significantly increased funding obligations” under its partnering contracts for Colal-Pred, and “the status of ongoing discussions with various parties to mitigate the potential impact on the company these funding obligations may have, there is now material uncertainty as to the receipt of milestone payments due.”

The company did not explain the nature of the funding obligations.

On 30 June, the company’s shares were quoted at 2.52 pence on the London Stock Exchange.

Copyright 2009 Evernow Publishing Ltd

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