Header updated on 24th April 2008

Market has been looking for an announcement re a licensing deal for Cetilistat, the obesity drug; instead it has been hit with the withdrawal of Renzapride, colonitis drug, following an unauspicious performance at Phase III. Folloiwng has been edited to reflect the situation

Alizyme is a speciality biopharmaceutical company that has been developing product categories for inflammatory gastrointestinal disorders, obesity and supportive cancer care . It is currently trading at a five year low of around 27p with a market cap. of around 60m. Prudential owned a near 20% stake (reduced in sale today?) There was good institutional taku-up of a placing in March rasing 10m at 50p; no wonder there has been "angry" selling. The directors hold 3.34million shares or about 1.7% of the equity (of which Tim McCarthy, CEO has 1.1million); thus, after some 10 years of development effort, they must be comletely focused on the success of the company and multiplying the value of their holdings (but with real doubts about their marketing competence). Alizyme had previously raised capital sums in the past three years at around 70p and 100p so it was somewhat surprising to see the share fall through its 70p support level. Clearly one reason is the current disaffection with the biopharm. market. Another has to be disappointment for the failure of the CEO, Tim McCarthy, to deliver on his expectation that 2007 would be a transformative year. The key question is whether 2008 will be that year and when is it likely to happen? The following points are relevant:

1. Alizyme did sign one deal in late-2007: with Prometheus Labs (U.S.) for the Colal-Pred, at a potential market of $250m, the smallest potential of their four products. Prometheus pay $2.5m up-front with a total of $15m payable upon future development milestones. They are responsible for all US development costs and will pay Alizyme undisclosed royalty rates which will increase with net sales. The deal was followed by a Japanese licensing agreement (which also gave Alizymen access to additional potential drug candidates).

2. This perhaps sets a precedent for subsequent deals for their other products. Cetistat (obesity) has an estimated potential of $1 billion p.a. sales and ATL-104 (mucositis) has a potential of $500m sales. The U.S. FDA has encouraged AZM to also launch a Phase III exercise for Cetistat for all diabetes sufferer because of positive II results for diabetes sufferers who also suffer from obesity.

3. Whilst the development programmes for the other drugs are on-going and appear to be satisfactorily funded from present resources, this is not the case for Cetilistat. The "Product and Company Update statement" (7th Jan 2008) says that 'the Phase III development programme is now ready to commence following the conclusion of a commercial deal'. So, perhaps for the first time, the development programme would be delayed if there was not a funding deal in either the U.S. or Europe. The reason for the sp shooting to nearly 200p in 2004 was the signing of a deal with Takada of Japan for some $50M development funding.

In response to a question at the Conference to report the Renzapride fiasco, McCarthy seemed pleased that there were six potential bidders for Cetilistat; however, that implies any announcement is some time away. When it comes, however, taking a line from the Takada and Prometheus deals it would seem likely that there would be of the order of $100m funding to support development. Of course, the major cash flow will be from licensing of actual sales. The analysts do their own discounted cash flow exercises; those seen tend to dwarf current valuations of the company.

There is not a strong argument for jumping in unless and until the sp establishes a baseline. Given the peaks in the sp, the time will probably come when there will be a very significant jump. An alternative scenario, is that management continue to rpove their level of incompetence and a buy-our results. Clearly the strength of the company is in their biochemists.

Eric

Year end for AZM is 31 December so results should be out some time this month but no announcement has yet been made.

Must confess have taken a quick and very welcome profit for now but will be coming back in as and when it looks right.

LONDON (Thomson Financial) - Obesity and diabetes drug development company Alizyme has announced that it has raised 10 mln stg in an institutional placing of 20 mln shares.

The company also announced in its full-year earnings statement that its cash levels at Dec 31 were 5.8 mln stg compared with 27.7 mln stg a year ago.

It also issued a research update this morning to say that the US FDA had agreed the remaining two protocols for late-stage tests of its obesity drug Cetilistat, and recommended that it lodge a new Investigational New Drug Application for the drug as a treatment for diabetes.

The new 2 pence shares represent about 10 pct of the company's issued share capital prior to the placing, and were placed at a placing price of 50 pence per share.

The placing price of the shares represents a premium of 3.6 pct to the closing middle market price on the London Stock Exchange yesterday, the company says.

ben.deighton@thomson.com

bsd/sal

Thanks Neil. Just seen this from their RNS:

Analyst briefing and webcast today:
Please note that an Analyst meeting is being held at the offices of Buchanan Communications, 45 Moorfields, London, EC2Y 9AE at 10:45am. A web cast will be available, to connect to the web cast facility, please go to:

www.mediaserve.buchanan.uk.com/webcasts/livegold/Irframes.htm

approximately 10 minutes (10:35am) before the start of the briefing. In addition to the web cast there will also be a conference call, please dial +44 (0) 20 8609 1435 and use pin number 952509#

Full RNS at:
AZM - RNS 6 March 2008

Interesting developments. Thanks for the RNS reference, Toya which was not showing on MoneyAM - only the AFX commentary. Gives a support level for the sp at 50p so should attract more investment funds. Worth going back in Toya at 50p because it should be a one way ride. I accept the fund-raising is a bit defensive - it buys time; but the piece about optimal deal terms on out-licensing has clearly persuaded the institutions so is good enough for me. I have topped up my own position at 49.5p

Eric

Current buying opportunity at 48.5p - surely has to trade above the placing price of 50p after the podcast.

don't do it! ..... chances are that sp will now slip back .... just because the shares were placed at 50p, and there is therefore emotional support at that level, there is no reason at all for it to hold same

Well, cynic, the market is often impossible to read and just seems to act in a contrary fashion. Personally, I prefer to work out what the value should be and where that value is likely to move in the reasonably near future. In this case, institutional investors have agreed to buy their share at 50p even though they could have bought at a lower price in the market - reflects a deal of confidence and a good working relationship with the management. We now know that a good reason why there hasn't been a Cetilistat deal is that they were looking for the FDA approval of two development programmes. The additional point re a diabetes study not linked to obesity per se (if I read it correctly) is potentially very significant and could open up another blockbuster market. I agree that emotions should not come into it but logical analysis should (always bearing in mind that investors/traders are a contrary bunch and logic sometimes does not enter into it).

Eric

I see there is a buy of just under 2 million shares at 50.15p or a value of 1 million. Prefer to follow him/her/them rather than cynical old cynic. lol!

I would normally have watched the webcast but have been out so will have a look later. Won't jump back just now as I'd have to sell elsewhere before I'm ready. So will continue to watch closely and hope to buy again at around 44p, bearing in mind that this is the level that has offered both resistance and support previously - though may end up having to pay more.

i was more than happy with the profit i made and banked .... in this sector have also sold out of SHP (modest profit) and OXB (good profit), but rebought OXB the other day a copper or so lower at 26 ..... will prob hold until after the figures .... no other pharmas in portfolio

Who is Ramping again??

Agree that pharmas are very much out of favour. The prospects for Alizyme have strengthened significantly: (a) FDA approvals for Cetistat proptocols; (b) new market opening up for Diabetes treatment; (c) foundations set for Cetilistat licensing; (d) promise of good newsflow this year for that and re Phase III reporting on renzapride and COLAL-PRED (e) 10m funds raised at 50p. So much more value built-up since share was trading in 100p to 180p range. From what I can see AZM is further forwrd than most comparable companies and has a better portfolio spread.

It is, of course, difficult to read the short term. You could conclude that this is one that it is best to tuck away - perhaps a 10-bagger over four to five years. I am happily building up a CFD position by topping up when there is a margin of funds. What about the short-term. A report is due on Renzapride in April but that could be just taken in market's stride. Probably the next step up will have to await the licensing agreement for Cetilistat; the pressure on that is that Phase III is awiting the agreement so I expect it by June.

Eric

Alizyme PLC
17 March 2008


For Immediate Release 17 March 2008


ALIZYME PLC



TR - 1: NOTIFICATION OF MAJOR INTERESTS IN SHARES



1. Identity of the issuer or the underlying issuer of existing
shares to which voting rights are attached:


Alizyme plc


2. Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights


3. Full name of person(s) subject to the notification obligation:


M&G Investment Funds 3


4. Full name of shareholder(s) (if different from 3.)


Nortrust Nominee Ltd A/C MKK01


5. Date of the transaction and date on which the threshold is crossed or
reached:


12 March 2008


6. Date on which issuer notified:


14 March 2008


7. Threshold(s) that is/are crossed or reached:


14%


8. Notified details:

A: Voting rights attached to shares

+------------+---------------------+------------------------------------------------+
|Class/type |Situation previous to|Resulting situation after the triggering |
|of shares |the Triggering |transaction |
| |transaction | |
|if possible +----------+----------+----------+-------------------+-----------------+
|using the |Number of |Number of |Number of |Number of voting |% of voting |
|ISIN CODE |Shares |Voting |shares |rights |rights |
| | |Rights +----------+----------+--------+--------+--------+
| | | |Direct |Direct |Indirect|Direct |Indirect|
+------------+----------+----------+----------+----------+--------+--------+--------+
|Ordinary |22,271,275|22,271,275|33,128,590|33,128,590| |14.98% | |
|Shares | | | | | | | |
| | | | | | | | |
|GB 2p | | | | | | | |
| | | | | | | | |
|GB0000374289| | | | | | | |
+------------+----------+----------+----------+----------+--------+--------+--------+

B: Financial Instruments

Resulting situation after the triggering transaction
Type of Expiration Exercise/ Number of voting % of voting
financial date Conversion rights that may be rights
instrument acquired if the
Period/Date instrument is
exercised/
converted.

n/a n/a n/a n/a n/a

Total (A+B)

Number of voting rights % of voting rights
33,128,590 14.98%


9. Chain of controlled undertakings through which the voting rights and/or the
financial instruments are effectively held, if applicable


n/a


Proxy Voting:


10. Name of the proxy holder:


n/a


11. Number of voting rights proxy holder will cease to hold:


n/a


12. Date on which proxy holder will cease to hold voting rights:


n/a


13. Additional information


With reference to item 3, M&G Investments Funds 3 is an Open Ended Investment
Company (OEIC) and is not a Prudential group company and must be separately
disclosed.


This OEIC Fund is managed by M&G Investment Management Limited (a wholly owned
subsidiary of Prudential plc) and will have been previously attributed to
Prudential plc solely on the basis that M&G Investment Management Ltd has direct
fund management control over the shares identified in this notification


14. Contact name:


David Campbell, Finance Director


15. Contact telephone number:


+ 44 (0) 1223 896000


For further information, please contact:

David Campbell, Finance Director
ALIZYME plc Tel No: + 44 (0) 1223 896000


Further information on Alizyme can be found on the Company's website:

www.alizyme.com


Alizyme PLC
17 March 2008


For Immediate Release 17 March 2008


ALIZYME PLC



TR - 1: NOTIFICATION OF MAJOR INTERESTS IN SHARES



1. Identity of the issuer or the underlying issuer of existing
shares to which voting rights are attached:


Alizyme plc


2. Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights


3. Full name of person(s) subject to the notification obligation:


Prudential plc group of companies


4. Full name of shareholder(s) (if different from 3.)


BK OF NEW YORK(NOMS)LTD/636922
NORTRUST NOMINEE LTD A/C MHF01
NORTRUST NOMINEE LTD A/C MKK01
NORTRUST NOMS LTD A/C MEL01
PRUCLT HSBC GIS NOM(UK) PAC AC
PRUCLT HSBC GIS NOM(UK) PPL AC
PSIT2 US HIGH TECH FUND


5. Date of the transaction and date on which the threshold is crossed or
reached:


12 March 2008


6. Date on which issuer notified:


14 March 2008


7. Threshold(s) that is/are crossed or reached:


19%





8. Notified details:

A: Voting rights attached to shares

+------------+---------------------+------------------------------------------------+
|Class/type |Situation previous to|Resulting situation after the triggering |
|of shares |the Triggering |transaction |
| |transaction | |
|if possible +----------+----------+----------+-------------------+-----------------+
|using the |Number of |Number of |Number of |Number of voting |% of voting |
|ISIN CODE |Shares |Voting |shares |rights |rights |
| | |Rights +----------+----------+--------+--------+--------+
| | | |Direct |Direct |Indirect|Direct |Indirect|
+------------+----------+----------+----------+----------+--------+--------+--------+
|Ordinary |29,569,831|29,569,831|44,197,627|44,197,627| |19.98% | |
|Shares | | | | | | | |
| | | | | | | | |
|GB 2p | | | | | | | |
| | | | | | | | |
|GB0000374289| | | | | | | |
+------------+----------+----------+----------+----------+--------+--------+--------+

B: Financial Instruments

Resulting situation after the triggering transaction
Type of Expiration Exercise/ Number of voting % of voting
financial date Conversion rights that may be rights
instrument acquired if the
Period/Date instrument is
exercised/
converted.

n/a n/a n/a n/a n/a

Total (A+B)

Number of voting rights % of voting rights
44,197,627 19.98%


9. Chain of controlled undertakings through which the voting rights and/or the
financial instruments are effectively held, if applicable


Prudential plc (parent Company)

M&G Group Limited (wholly owned subsidiary of Prudential plc)

M&G Limited (wholly owned subsidiary of M&G Group Limited)

M&G Investment Management Limited (wholly owned subsidiary of M&G Limited)

M&G Securities Limited (wholly owned subsidiary of M&G Limited)

Prudential Pensions Limited (wholly owned subsidiary of Prudential plc)

The Prudential Assurance Company Limited (wholly owned subsidiary of Prudential
plc)



Proxy Voting:


10. Name of the proxy holder:


n/a


11. Number of voting rights proxy holder will cease to hold:


n/a


12. Date on which proxy holder will cease to hold voting rights:


n/a


13. Additional information


None


14. Contact name:


David Campbell, Finance Director


15. Contact telephone number:


+ 44 (0) 1223 896000


For further information, please contact:

David Campbell, Finance Director
ALIZYME plc Tel No: + 44 (0) 1223 896000


Further information on Alizyme can be found on the Company's website:


www.alizyme.com




This information is provided by RNS
The company news service from the London Stock Exchange






Alizyme PLC
17 March 2008


For Immediate Release 17 March 2008


ALIZYME PLC



TR - 1: NOTIFICATION OF MAJOR INTERESTS IN SHARES



1. Identity of the issuer or the underlying issuer of existing
shares to which voting rights are attached:


Alizyme plc


2. Reason for the notification:

An acquisition or disposal of voting rights
An event changing the breakdown of voting rights


3. Full name of person(s) subject to the notification obligation:


Barclays PLC


4. Full name of shareholder(s) (if different from 3.)



5. Date of the transaction and date on which the threshold is crossed or
reached:


11/03/2008


6. Date on which issuer notified:


12/03/2008


7. Threshold(s) that is/are crossed or reached:


5% to below notifiable %


8. Notified details:

A: Voting rights attached to shares

+------------+---------------------+------------------------------------------------------+
|Class/type |Situation previous to|Resulting situation after the triggering transaction |
|of shares |the Triggering | |
| |transaction | |
|if possible +----------+----------+----------+---------------------+---------------------+
|using the |Number of |Number of |Number of |Number of voting |% of voting rights |
|ISIN CODE |Shares |Voting |shares |rights | |
| | |Rights +----------+----------+----------+----------+----------+
| | | | |Direct |Indirect |Direct |Indirect |
+------------+----------+----------+----------+----------+----------+----------+----------+
|Ordinary |11,025,963|11,025,963|Not |Not |Not |Not |Not |
|Shares | | |Reportable|Reportable|Reportable|Reportable|Reportable|
| | | | | | | | |
|GB0000374289| | | | | | | |
+------------+----------+----------+----------+----------+----------+----------+----------+

B: Financial Instruments

Resulting situation after the triggering transaction
Type of Expiration Exercise/ Number of voting % of voting
financial date Conversion rights that may be rights
instrument acquired if the
Period/Date instrument is
exercised/
converted.

n/a n/a n/a n/a n/a


Total (A+B)

Number of voting rights % of voting rights
Not Reportable Not Reportable


9. Chain of controlled undertakings through which the voting rights and/or the
financial instruments are effectively held, if applicable


Proxy Voting:


10. Name of the proxy holder:


n/a


11. Number of voting rights proxy holder will cease to hold:


n/a


12. Date on which proxy holder will cease to hold voting rights:


n/a


13. Additional information


n/a


14. Contact name:


David Campbell, Finance Director


15. Contact telephone number:


+ 44 (0) 1223 896000


For further information, please contact:

David Campbell, Finance Director
ALIZYME plc Tel No: + 44 (0) 1223 896000


Further information on Alizyme can be found on the Company's website:


www.alizyme.com




This information is provided by RNS
The company news service from the London Stock Exchange

LONDON (Thomson Financial) - Investec Securities has upgraded Alizyme to 'Buy' from 'Hold', with a price target of 59p, saying it believes the wait for a major partnering deal is "almost over".

The broker said it hopes that the company's obesity drug Cetilistat will deliver a licensing deal in the short term, and adds that the company's Irritable Bowel Syndrome drug Renzapride may also be outlicensed in the next 12 months.

It adds that further value may come from the imminent results from late stage trials on Renzapride, due to report in April, and the ulcerative colitis treatment COLAL-PRED, which it expects to be positive. In a note to clients, the broker says it expects the company will not be coming back to the market for more cash for at least two years, pointing out that Alizyme has promised no more major R&D for at least two years without it being funded by a development partner.

ben.deighton@thomson.com

bsd/slm

COPYRIGHT

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For more information and to contact AFX: www.afxnews.com and www.afxpress.com

This snippet from The Times on Saturday:

"Alizyme rose 1p to 39p ahead of results next week. Investec said that it was close to ending a five-year search for a big development partner."

Also in the FT, and the Guardian,
We shall see!

Also a mention in Saturday's FT re Investec comment and specifically relating it to Cetilistat.

Thanks for that Neil. I bought back in this morning as it seems to be moving in the right direction in any case.

Let's hope so Toya, it would be nice to see the SP stretch it's legs a bit!
Good luck!

Yes, even as far as 50p would be welcome. But when they really do manage another deal it could go much further.