Biotech Values

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Dew>ALIZYME, I found no discussion re this company or
their products on board, would appreciate comments
on the company and the following article
Thanks

ALIZYME (LSE:AZM.L)57.50/52wk 55.75-128.00>
Alizyme Accelerates Pipeline Deal Flow
posted on: December 30, 2007 | about stocks: ALZYF.PK
http://www.seekingalpha.com/article/58598-alizyme-accelerates-pipeline-deal-flow
Mike Havrilla

In the interest of global and currency diversification, I offer Cambridge, UK-based Alizyme (ALZYF.PK) [London: AZM] as my top pick for 2008 among foreign-listed emerging biotech companies. (E*TRADE now offers a low cost, online global trading platform which allows U.S investors to purchase stocks on select foreign exchanges in their local currencies providing dual diversification opportunities.)

Alizyme is a specialty biopharmaceutical company that is developing product candidates for inflammatory gastrointestinal disorders, obesity, and supportive cancer care. The Company currently trades near its all-time lows at 57.50 pence (the British pound sterling is divided into 100 pence) with a market cap of about $115 million pounds (or $230 million US dollars – just multiply by two for the conversion). Insiders also appear bullish on Alizyme's prospects, with a total of 235,000 shares bought from August 2006 to February 2007 at much higher share prices of between 84 – 93 pence. Also, no insider selling has occurred since March 2006 and Prudential (PRU) owns a 15% stake in Alizyme through various wholly-owned subsidiaries, based on a regulatory filing from two weeks ago. The Company has four drug candidates in its late-stage clinical development pipeline, including cetilistat for obesity (Phase 2 ongoing and Phase 3 ready to begin), renzapride for irritable bowel syndrome (Phase 3), Colal-Pred for ulcerative colitis (Phase 3), and ATL-104 (Phase 2a completed) for mucositis (a common side effect of many cancer treatments causing ulcerations in the mouth and throughout the gastrointestinal tract).

Last month, Alizyme signed an exclusive, back-end loaded licensing deal for Colal-Pred in North America with privately held Prometheus Labs of San Diego for $2.5 million in upfront cash and $15 million payable upon future development milestones. Colal-Pred is a unique formulation of the widely used steroid prednisolone, designed for once-daily oral administration and colon-targeted delivery in order to avoid the systemic side effects associated with steroids while maintaining effectiveness in the treatment of ulcerative colitis. Prometheus will be responsible for all development costs in North America and will pay Alizyme undisclosed royalty rates which increase with higher annual net sales. An estimated 700,000 people in the U.S alone and 2 million people worldwide in major territories suffer from ulcerative colitis. Top line results from an ongoing Phase 3 trial in Europe are expected in 2Q08 to support a MAA filing in 2H08 for European approval with expected launch one year later in 2H09. Prometheus is expected to begin a Phase 2 trial in the U.S during 1H08 with an anticipated NDA filing in 2011.

Cetilistat is a peripherally acting lipase inhibitor for the treatment of obesity and obesity with diabetes, which has similar effects to orlistat by blocking the absorption of dietary fat – marketed in the U.S by Roche [Germany: RO] as Xenical (prescription strength) and by Glaxo (GSK) as Alli (over-the-counter). Previously reported Phase 2 results revealed that Alizyme's cetilistat was much better tolerated (i.e. less gastrointestinal side effects) than orlistat while both drugs demonstrated similar effectiveness in the form of weight loss. The Company's partner in Japan for cetilistat is Takeda Pharma (Tokyo: 4502) and Alizyme has received approval from the FDA to begin its first pivotal Phase 3 trial under a special protocol assessment. Renzapride is the Company's drug candidate for irritable bowel syndrome, which is in Phase 3 trials in the US and pre-Phase 3 status in Europe. Results are expected in 1H08 for a pivotal Phase 3 trial in the US for constipation-predominant irritable bowel syndrome and the FDA is reviewing plans for a second pivotal Phase 3 trial. Before being withdrawn from the market due to cardiovascular concerns, related drug Zelnorm achieved sales of over $500 million for 2006. Alizyme has conducted successful Phase 2 proof-of-concept trials for ATL-104 in the treatment of mucositis and is currently working with the FDA and EMEA on the appropriate clinical development program.

Alizyme's robust, late-stage clinical development program includes two drugs with blockbuster, billion dollar sales potential in cetilistat and renzapride. Colal-Pred and ATL-104 target smaller markets with peak sales potential of $250 million and $500 million, respectively. First half 2007 results included a net loss of 12.3 million pounds with cash/equivalents of just over $19 million pounds. The Company has adequate liquidity to fund operations and clinical development until 2H08. Alizyme has committed additional resources to secure licensing deals for all four products in its pipeline with the appointment of consulting firms NovaQuest and Ferghana Partners. The Company has relied on equity financing to fund operations since its listing on the London Stock Exchange in 2000 and is expected to shift its focus to licensing deals such as the strategic partnership and co-development deal signed in early December with bio-venture firm TSD Japan for the exclusive rights to co-develop Colal-Pred in Japan and the identification of new drug candidates in Japan for in-licensing or acquisition by Alizyme for ex-Japan development.

Disclosure: none
Mike Havrilla
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