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

At the moment the down trend in share price is about 27% pa for the last 2 years. Seems a good bet for me!!

hope so

I was taking the ?

Fred come back 50 years then take the pee!!

there is always light at the end of the tunnel for some people...

the problem is the length of the tunnel!

Ludlow Castle Would very much like a word - could you contact me through the e-mail service, please?

So 2007 was not the year which is a bit of egg on corporate faces. Always a hostage to fortune giving dates and shows inexperience. It is a long tunnel but some of us believe that Nirvana is at the end of it and worth waiting for.

Happy New Year to all AZM invstors, patient and impatient.

Posted on a rival site by damian.

Alizyme a Tip of the Year for 2008:

............................

ALIZYME ACCELERATES PIPELINE DEAL FLOW
Seeking Alpha
Mike Havrilla
30th December 2007

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.

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

RNS today:
Alizyme - Company and Product Update

Summary:
Cambridge, UK, 7 January 2008, Alizyme plc ('Alizyme' or 'the Company') (LSE:
AZM) announces completion of recruitment into its COLAL-PRED(R) Phase III
clinical trial and provides an update on its other product development and
corporate activities.

COLAL-PRED(R) - completion of patient recruitment into Phase III
registration clinical trial with results anticipated end June 2008
Cetilistat - partnering discussions ongoing ahead of commencing Phase
III development programme
Renzapride - on schedule to report pivotal efficacy Phase III results in
April 2008
ATL-104 - preparing to commence second Phase II trial in H2 2008
Partnering and commercialisation interest across the portfolio

i wasnt expecting that, choke!!!

Good grief - looks like all the smaller pharmacos are being hammered in recent months. Glad I've remained on the sidelines. Time to watch sp will be when those Phase III results are expected in April - these will truly be pivotal, as the RNS says. I don't expect there'll be much upward movement between now and then (but of course I could be wrong).

have we got support here?

Nar1: chart not looking good. Last time AZM was this low was back in 2003

At this rate we could revisit 26 p -- But this is a bargain we get to the bottom

A little ironic the closer we are to the final product the lower the SP. Also ironic because the bigger bio's/pharmas are doing well. Perhaps the future isnt as bright as we think it is going to be. Im in this for all or nothing!! Looks like being nothing. I suppose the directors will be showing thier confidence and buying the shares in the millions.

Kivver: not absolutely sure about closed time periods but I'm pretty certain that directors can't invest until results are out; e.g. Just Retirement directors have piled in following the drop with results.

Suggest we really take on board the posting at 487 by Ludlow Castle. Its clear that some have lost patience. 2007 was supposed to be breakthrough year but all we had was the US and Japanese deals for COLAL-PRED, the smallest of their portfolio. Those numbers didn't look very big but if you work on the basis that they represent a minimum of 1/11th of the potential the minimum value of the company must be at least 100p per share if not double that. I can show the calculations if anyone feels it would help. The cap is now down to under £100m when you have 1 billion dollar blockbusters! They are now having to mark time with Cetilistat awaiting partner(s) so there is, for the first time, pressure to get the deal(s) done. The darkest period comes just before the dawn!

Eric

Whats the bottom looks like we just broke thru 46p MACD and MA all NEGATIVE !!!

I also do not understand why price has fallen so much with so little volume selling yesterday and today. 700,000 shares traded is miniscule. All I know is the market makers are not getting my shares at that price!! Probably more fool me than them!

Well the graph does not lie my friend AZM is coming/ has come down and fast the question now is when will it stop and when shall we all buy back in and make a tidy profit !!!

MACD negative,
150 / 200 negative,
RSI still got space to go,
TRIX negative. ( rejected cross over)

I have made this comment before about price movements with AZM. Many days when the price has fallen there has actually been a balance in buying and selling. The phenomenon that is repeatedly the case with AZM is that nearly all the sales are automated. It could well be the case is that a trader(s) is playing the system: he sells short in relatively small quantities, waits for the price to fall and buys back in a lump.

What you would expect is that the price gets to a sufficiently low level for the value buyers to climb on-board, thus reversing the trend and causing a significant bounce. Am I saying that there is little risk in buying at this level. My only concern would be whether someone knows something that I don't, i.e. there are sound reasons for the sale off. The only reason for that is that the market doesn't believe that they will get a decent sum from partnering the products. But if they decided to auction the company off, what would the price be: I suggest it would be driven over 2. So my conclusion is that the bounce will come, sooner rather than later.

Eric