RNS Number : 2703C
Alizyme PLC
29 August 2008
For Immediate Release 29 August 2008
ALIZYME PLC
INTERIM RESULTS
For the six months ended 30 June 2008
Cambridge UK, 29 August 2008: Alizyme plc (LSE: AZM) today announces its interim results for the six months ended 30 June 2008
In the year to date, we have further progressed the development of our product portfolio and remain focused on the commercialisation of
these products.
Highlights
Operational
Cetilistat (obesity and diabetes)
* Protocols of all three studies in the Phase III programme agreed with FDA under SPA procedure
* FDA indicated a potential labelling for type 2 diabetes, as well as for obesity
COLAL-PRED� (ulcerative colitis)
* Headline results reported for EU Phase III clinical trial in approximately 800 patients with active moderate to severe ulcerative
colitis
* Licence agreement with Norgine BV for Europe and other territories; EUR2.0 million received up front
* Phase II clinical development commenced in the US by Prometheus Laboratories Inc
ATL-104 (mucositis)
* Transfer of manufacturing technology to commercial facility ongoing
* Preparations for Phase II study in patients with solid cancer tumours ongoing
Renzapride (irritable bowel syndrome)
* Development by Alizyme discontinued in April following results of Phase III clinical trial
Financial
* Revenues of �0.05 million recognised in the period (six months ended 30 June 2007: nil)
* Net loss after tax of �8.9 million (six months ended 30 June 2007: �12.3 million)
* Cash, cash equivalents and money market investments of �7.7 million at 30 June 2008 (�19.1 million at 30 June 2007, �5.8 million
at 31 December 2007)
* �10.0 million gross raised from shareholders in the placing in March 2008
* Cost saving measures introduced following revised cash flow projections
Board changes
* David Campbell to step down as Finance Director and Company Secretary
* Richard Forrest to step down as Non-Executive Director
On outlook, Tim McCarthy, CEO, said: "Alizyme looks to build on the commercial and clinical progress achieved during the first half of
the year as discussions with potential partners in relation to all products in our portfolio continue. Further license opportunities are
being pursued with the objective of building multiple revenue streams and leveraging off the virtual business model."
For further information, please contact:
ALIZYME PLC Tel: + 44 (0) 1223 896000
Tim McCarthy, Chief
Executive Officer
UK/Europe Enquiries
BUCHANAN COMMUNICATIONS Tel: + 44 (0) 20 7466 5000
Lisa Baderoon
Rebecca Skye Dietrich
Further information on Alizyme can be found on the Company's website: www.alizyme.com
Interim management report
to the members of Alizyme plc
Cautionary Statement
This Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to assess the Group's
strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.
The IMR contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information
available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent
uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
Overview
During the first half of the year, our main focus has been on the commercialisation of our diverse portfolio, which comprises three late
stage products, including one in Phase III development. All of these products have competitive profiles and significant commercial
potential.
Operational
Cetilistat
Alizyme's metabolic product, cetilistat, is being developed for the treatment of obesity and associated co-morbidities (including type 2
diabetes). It is a gastrointestinal lipase inhibitor that blocks fat digestion and absorption, leading to reduced energy intake, and thus
weight loss. It is distinct from most other anti-obesity agents as it does not act on the brain to reduce appetite, but acts peripherally.
The compound remains in the gastrointestinal tract with no significant absorption into the body. It can, therefore, be expected to have a
superior risk-benefit profile to centrally acting drugs. Accordingly, cetilistat is not subject to the safety concerns generally associated
with centrally acting drugs.
Roche's Xenical� is an approved obesity product and is also a peripherally acting lipase inhibitor. In clinical trials cetilistat has been
demonstrated to be significantly better tolerated than Xenical�, which has side effects that can detrimentally affect patient compliance.
In March 2008, Alizyme announced that FDA had agreed all three protocols for its Phase III development programme for cetilistat in the
treatment of obesity under the Special Protocol Assessment ("SPA") procedure and recommended that Alizyme open a separate IND for the
investigation of cetilistat in diabetes.
Takeda Pharmaceutical Company Limited ("Takeda"), our partner in Japan, has been conducting a Phase II study in obese diabetics. The
results from this study are due to be reported later this year.
Alizyme continues discussions in relation to licensing this product for territories outside of Japan.
COLAL-PRED�
COLAL-PRED� is a proprietary gastrointestinal product developed by Alizyme for the treatment of ulcerative colitis, an inflammatory
disease of the colon that causes symptoms such as abdominal pain, bleeding, cramping, fatigue and diarrhoea. These conditions are
characterised by episodes of acute flare of the inflammation, followed by periods of remission. In severe cases, surgery may be required to
remove the diseased tissue. This market is dominated by anti-inflammatory steroids and 5-ASA products, which have safety and/or efficacy
issues.
COLAL-PRED� is the combination of Alizyme's proprietary colonic drug delivery system, COLAL�, and prednisolone metasulfobenzoate sodium
("PMSBS"), an approved steroid in Europe. COLAL-PRED� has a coating that is broken down only in the colon, by locally occurring bacteria.
This leads to topical delivery of PMSBS to the colon, rather than systemic delivery. It has been shown in a Phase III clinical trial to
provide a significantly improved risk-benefit profile to that of conventional oral prednisolone.
Prometheus Laboratories Inc, Alizyme's partner for COLAL-PRED� in North America, commenced Phase II clinical development for the
treatment of ulcerative colitis in the US in May 2008.
TSD Japan Inc, Alizyme's partner for COLAL-PRED� in Japan, has continued preparation for a Phase I study that is expected to commence in
the second half of 2008.
In June 2008, Alizyme entered into a licence agreement with Norgine BV, a leading European specialty pharmaceutical company with a focus
on gastroenterology. The agreement comprises an exclusive licence to Norgine to develop and market COLAL-PRED� in Europe, South Africa,
Australia and New Zealand. Alizyme received an upfront payment of EUR2.0 million, with additional payments of up to EUR40.75 million
receivable on the achievement of future development and sales milestones. The agreement provides that Norgine is responsible for
commercialisation and for payment of double digit royalty rates to Alizyme that increase with higher annual net sales levels.
In January 2008, Alizyme announced the completion of patient recruitment into the pivotal registration Phase III trial of COLAL-PRED� in
patients with active moderate-to-severe ulcerative colitis. In July 2008, Alizyme reported headline trial results that support the product
profile of COLAL-PRED� as a safe treatment for acute ulcerative colitis. The study endpoints were comparisons of efficacy, safety and the
combination of safety and efficacy, between COLAL-PRED� and conventional prednisolone. COLAL-PRED� demonstrated superior safety and superior
combined safety and efficacy. A co-primary endpoint based on the Disease Activity Index of efficacy of COLAL-PRED� to conventional
prednisolone was not met. However, COLAL-PRED� did show equivalent efficacy compared to conventional prednisolone after 8 weeks' dosing in
the treatment of acute UC, based on patient reported symptoms. The results also suggest the potential for use in the maintenance of
remission of ulcerative colitis.
The Marketing Authorisation Application ("MAA"), previously anticipated in Q4 2008, will be delayed due to one co-primary end point not
being met. However, we continue review of the data with our partners and regulatory advisors. In conjunction with our existing partners, we
look to progress the development of COLAL-PRED� as a safe and effective treatment for ulcerative colitis.
Following the publication of the Phase III studies, Alizyme has received enquiries in relation to commercialisation of COLAL-PRED� for
the territories where it is not currently licensed to commercial partners.
ATL-104
ATL-104 is being developed by Alizyme as an orally administered mouthwash for the treatment of mucositis of the mouth and
gastrointestinal tract arising during cancer treatment. This provides ease and convenience of administration and enables local delivery of
treatment for oral and gastrointestinal mucositis with no significant absorption into the body.
Globally there are over 4 million new cases of cancer each year. Mucositis occurs in up to 80% of patients being treated for cancer.
Mucositis is characterised by severe ulceration, bleeding and pain in the mouth and gastrointestinal tract, caused by damage to the cells
that line these tissues by cancer chemotherapy and radiotherapy. These symptoms can be very painful (requiring the administration of
opiates), can reduce the ability of the patient to receive nutrition orally, can be a source of infection and can be potentially life
threatening.
Having successfully completed a Phase IIa 'proof of concept' clinical trial in patients with lymphoma and myeloma, Alizyme is preparing
ATL-104 for a second Phase II study, this time in patients with solid cancer tumours suffering from mucositis. In addition, transfer of
manufacturing technology to a commercial facility in preparation for manufacturing scale-up for Phase III clinical trials and commercial
supply is ongoing.
Alizyme is progressing discussions with a number of potential license partners for this product.
Renzapride
In April 2008, Alizyme announced that following clinical trial results from Study 038, its Phase III study of renzapride in
constipation-predominant irritable bowel syndrome ("IBS-C"), no further development would be carried out by Alizyme. As a result, Study 052,
the open label extension study to evaluate the long-term safety and tolerability of renzapride, was also discontinued. Renzapride therefore
no longer forms part of Alizyme's development portfolio.
Financial review
The unaudited condensed financial statements for the six months ended 30 June 2008 are prepared in accordance with the Group's
accounting policies based on International Financial Reporting Standards ("IFRS") as adopted by the European Union.
In the six months ended 30 June 2008, Alizyme made a net loss of �8.9 million (six months ended 30 June 2007: �12.3 million).
Revenues of �0.05 million were recognised in the six months ended 30 June 2008, relating to the elements of the US$2.5 million (�1.2
million) up front payment received from Prometheus Laboratories Inc in November 2007 and of the EUR2.0 million (�1.6 million) received from
Norgine BV in June 2008 that were recognised during the period. There was no revenue for the six months ended 30 June 2007.
Net cash outflow from operating activities for the period was �7.5 million (six months ended 30 June 2007: �9.3 million).
Cash, cash equivalents and money market investments were �7.7 million at 30 June 2008 (�19.1 million at 30 June 2007, �5.8 million at 31
December 2007).
Research and development expenditure was �8.8 million (six months ended 30 June 2007: �12.8 million), reflecting expenditure on the
Phase III clinical trials for renzapride and COLAL-PRED� and the long term safety study for renzapride. All costs associated with completing
the renzapride studies have been recognised in the period.
Alizyme's outsourcing model means that the limited clinical activity planned for the second half of the year will result in
substantially lower research and development expenditure for that period.
Management and administration expenses were �0.7 million (six months ended 30 June 2007: �0.7 million). In addition, share-based payment
costs of �0.3 million (six months ended 30 June 2007: �0.3 million) have been charged for the period.
The Directors have revised their forecasts of the cash flow requirements of the Company following significantly increased costs incurred
in connection with clinical trial activity. The Directors have made reasonable assumptions about reductions of these clinical trial costs
and other cost reduction measures, as well as income on achievement of milestones by third parties under existing licence agreements. Such
reductions and income would enable the Company to continue operations through to the end of 2009 without reliance on revenue streams from
new partnerships or further raising of capital. However, as described in note 1 to the condensed financial statements with respect to the
Company's ability to continue as a going concern, those assumptions are subject to material uncertainties.
Following completion of Phase III studies for renzapride and COLAL-PRED� earlier this year, the ongoing clinical trial activity has
significantly reduced and, as a result, the Directors are in the process of rationalising headcount as well as implementing other cost
reduction strategies as appropriate.
Board changes
We announce today that David Campbell has informed the Board that he wishes to step down from his role as Finance Director and Company
Secretary and pursue other opportunities and interests. He will formally leave the Company later this year.
We also announce today that Richard Forrest is stepping down as a Non-Executive Director with effect from 31 August 2008.
We wish to thank both David and Richard for the commitment and support that they have provided to the Company and wish them every
success in the future.
Risks and uncertainties
Alizyme faces a number of general risks and uncertainties that are common to biopharmaceutical development companies that are described
in the Annual Report for the year ended 31 December 2007, which do not form part of this report. In the forthcoming period to 31 December
2008, the key risks facing the Company are as follows:
It had been anticipated that a MAA for COLAL-PRED� would be submitted in the EU in Q4 2008. There is now uncertainty over the timing of
a submission. Submission of an MAA may result in restriction of indication, denial of approval or demands for additional data.
The results from the Phase II study of cetilistat by Takeda are due to be reported this year. There can be no certainty as to the
outcome of this study. If successful, we anticipate that Takeda will apply to commence a Phase III study. However, this decision will be
made by Takeda, and the ability to commence a study would be subject to regulatory approval, which may result in demands for additional
data, amendments to the protocol or delay, and which is not certain.
The condensed financial statements have been prepared on a going concern basis, relying on assumptions about income from future
milestones and reductions in the costs incurred by the Group as explained in note 1 to the condensed financial statements. These events and
conditions represent material uncertainties over the profile of Alizyme's future cash flows and hence its ability to continue as a going
concern.
Outlook
Alizyme looks to build on the commercial and clinical progress achieved during the first half of the year as discussions with potential
partners in relation to all products in our portfolio continue. Further license opportunities are being pursued with the objective of
building multiple revenue streams and leveraging off the virtual business model. We take this opportunity to thank the team at Alizyme and
our collaborators for their significant contribution, commitment and effort throughout the period.
Responsibility statement
We confirm that to the best of our knowledge:
* the condensed set of financial statements has been prepared in accordance with IAS 34 - 'Interim Financial Reporting';
* the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
* the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
By order of the Board
Sir Brian Richards Tim McCarthy
Chairman Chief Executive Officer
29 August 2008 29 August 2008
Independent review report to Alizyme plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the interim statement for the six months
ended 30 June 2008, which comprises the condensed consolidated income statement, the condensed consolidated balance sheet, the condensed
consolidated statement of changes in equity, the condensed consolidated cash flow statement and related notes 1 to 16. We have read the
other information contained in the interim statement and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with International Standard on Review Engagements 2410 issued by the Auditing
Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company for our review work, for this report or for the conclusions we have formed.
Directors' responsibilities
The interim statement is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the
interim statement in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements are prepared in accordance with IFRS as adopted by the European Union. The
condensed set of financial statements included in the interim statement has been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim statement based
on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim
Financial information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United
Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the
interim statement for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with International
Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services
Authority.
Emphasis of matter - going concern
Without qualifying our conclusion, we draw attention to the disclosures made in note 1 of the condensed financial statements concerning
the Group's ability to continue as a going concern. These include the following uncertainties:
* Receipt of milestone income from third parties under existing licence agreements
* Timing and cost to completion of known clinical trial activity undertaken by third parties on behalf of the Group
These events and conditions, along with other matters as set forth in note 1, indicate the existence of material uncertainties which may
cast significant doubt about the Group's ability to continue as a going concern. The interim report does not include the adjustments that
would result if the Group was unable to continue as a going concern as it is not practicable to determine or quantify them.
Deloitte & Touche LLP
Chartered Accountants
Cambridge, United Kingdom
29 August 2008
Notes:
A review does not provide assurance on the maintenance and integrity of the website, including controls used to achieve this, and in
particular on whether any changes may have occurred to the financial information since first published. These matters are the responsibility
of the Directors but no control procedures can provide absolute assurance in this area.
Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other
jurisdictions.
Condensed consolidated income statement
for the six months ended 30 June 2008
Unaudited
Six Six Twelve months
months months ended
ended ended 31 December
30 June 30 June 2007
2008 2007 Audited
Notes �000's �000's �000's
Revenue 6 49 - 13
__________________________________________
Operating expenses
Research and development (8,770) (12,761) (31,136)
expenses
__________________________________________
Management and administration
excluding IFRS 2 charge (725) (730) (1,713)
Share-based payment (323) (312) (676)
__________________________________________
Total management and (1,048) (1,042) (2,389)
administration expenses
__________________________________________
Total operating expenses (9,818) (13,803) (33,525)
__________________________________________
Operating loss (9,769) (13,803) (33,512)
Investment income 185 563 845
Loss on foreign exchange (21) (32) (36)
transactions
__________________________________________
Loss on ordinary activities (9,605) (13,272) (32,703)
before taxation
Taxation on loss on ordinary 686 931 1,458
activities
__________________________________________
Loss for the financial period
being the retained loss for
the period attributed to the
members of Alizyme plc (8,919) (12,341) (31,245)
__________________________________________
Loss per share for the period 7 (4.2)p (6.2)p (15.6)p
- basic and diluted
All amounts relate to continuing activities.
Condensed consolidated balance sheet
As at 30 June 2008
Unaudited
30 June 30 June 31 December
2008 2007 2007
Audited
Notes �000's �000's �000's
Non-current assets
Property, plant and equipment 8 134 208 176
__________________________________________
Current assets
Research and development tax 686 931 1,458
credit
Prepayments 2,047 2,492 2,673
Accrued income 51 82 82
Other receivables 160 189 398
Money market investments 9 1,650 4,680 3,800
Cash and cash equivalents 9 6,026 14,413 2,002
__________________________________________
10,620 22,787 10,413
__________________________________________
Current liabilities
Trade and other payables 10 (6,867) (4,209) (8,888)
Deferred revenue (187) - (80)
__________________________________________
(7,054) (4,209) (8,968)
__________________________________________
Net current assets 3,566 18,578 1,445
__________________________________________
Total assets less current 3,700 18,786 1,621
liabilities
__________________________________________
Non-current liabilities
Deferred revenue (2,540) - (1,115)
Long-term provisions - (110) (8)
__________________________________________
(2,540) (110) (1,123)
__________________________________________
Net assets 1,160 18,676 498
__________________________________________
Equity
Share capital 4,422 4,007 4,021
Share premium account 12 116,569 107,364 107,712
Capital reserve 1,530 1,530 1,530
Share-based payment reserve 2,865 2,178 2,542
Retained loss (124,226) (96,403) (115,307)
__________________________________________
Total equity 13 1,160 18,676 498
__________________________________________
Condensed consolidated statement of changes in equity
Unaudited
Share capital Share premium Capital reserve Share-based payment Retained Total
account reserve loss
�000's �000's �000's �000's �000's �000's
Balance as at 31 December 2006 3,994 107,106 1,530 1,866 (84,062) 30,434
Loss for the period - - - - (12,341) (12,341)
Share-based payment - - - 312 - 312
Issue of share capital 13 258 - - - 271
________________________________________________________________________
Balance as at 30 June 2007 4,007 107,364 1,530 2,178 (96,403) 18,676
________________________________________________________________________
Balance as at 31 December 2007 4,021 107,712 1,530 2,542 (115,307) 498
Loss for the period - - - - (8,919) (8,919)
Share-based payment - - - 323 - 323
Issue of share capital 401 9,616 - - - 10,017
Expenses of share issue - (759) - - - (759)
________________________________________________________________________
Balance as at 30 June 2008 4,422 116,569 1,530 2,865 (124,226) 1,160
________________________________________________________________________
Balance as at 31 December 2006 3,994 107,106 1,530 1,866 (84,062) 30,434
Loss for the year - - - - (31,245) (31,245)
Share-based payment - - - 676 - 676
Issue of share capital 27 606 - - - 633
________________________________________________________________________
Balance as at 31 December 2007 4,021 107,712 1,530 2,542 (115,307) 498
________________________________________________________________________
Condensed consolidated cash flow statement
for the six months ended 30 June 2008
Unaudited
Six Six Twelve months
months months ended
ended ended 31 December 2007
30 June 30 June Audited
2008 2007
�000's �000's �000's
Operating activities
Operating loss (9,769) (13,803) (33,512)
Depreciation charge 43 29 73
Decrease in accounts 926 1,389 999
receivable
(Decrease)/increase in (2,021) 1,609 6,288
accounts payable
Increase in deferred revenue 1,532 - 1,195
(Decrease)/increase in (8) 26 (76)
provision
Share-based payment expense 323 312 676
__________________________________________
Net cash outflow from (8,974) (10,438) (24,357)
operations
Research and development tax 1,458 1,119 1,119
credit received
__________________________________________
Net cash outflow from (7,516) (9,319) (23,238)
operating activities
__________________________________________
Investing activities
Interest received 154 597 879
Net cash withdrawn from money 2,150 620 1,500
market investments
Purchase of property, plant (1) (172) (184)
and equipment
__________________________________________
Net cash inflow from investing 2,303 1,045 2,195
activities
__________________________________________
Financing activities
Proceeds on issue of ordinary 9,258 271 633
share capital (net of
expenses)
__________________________________________
Net cash inflow from financing 9,258 271 633
activities
__________________________________________
Net increase/(decrease) in 4,045 (8,003) (20,410)
cash and cash equivalents
Cash and cash equivalents at 2,002 22,448 22,448
beginning of period
Effect of foreign exchange (21) (32) (36)
rate changes
__________________________________________
Cash and cash equivalents at 6,026 14,413 2,002
end of period
__________________________________________
Notes to the condensed financial statements
for the six months ended 30 June 2008
1 Basis of preparation
These interim financial statements are condensed financial statements that have been prepared in accordance with IAS 34 - 'Interim
Financial Reporting' and were approved by the Board on 29 August 2008. They do not constitute statutory financial statements within the
meaning of Section 240 of the Companies Act 1985.
The information for the year ended 31 December 2007 does not constitute statutory accounts as defined in Section 240 of the Companies
Act 1985. A copy of the statutory accounts for the year ended 31 December 2007 has been delivered to the Registrar of Companies. Those
accounts were prepared in accordance with IFRS as adopted by the European Union. The auditors' report on those accounts was not qualified
and did not contain statements under Section 237(2) or (3) of the Companies Act 1985.
Results for the six month periods ended 30 June 2008 and 30 June 2007 have not been audited.
Going concern
In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the
Group can continue in operational existence for the foreseeable future.
Alizyme had cash, cash equivalents and money market investments of �7.7 million as at 30 June 2008 and incurred a loss of �8.9 million
for the six months ended 30 June 2008. The Group's Directors have prepared a detailed cash flow forecast for the period ending 31 December
2009 ("the Forecast") which include a number of significant assumptions regarding income, expenditure and cashflows.
The Forecast assumes receipt of income on achievement of milestones by third parties under existing licence agreements. Whilst the
amounts of the assumed milestones are contracted, the events giving rise to receipt of such milestones, such as further clinical development
of the licensed product, are outside the direct control of Alizyme and the timing of receipt of any such milestone is inherently uncertain.
Based on their understanding of the status of product development and their discussions with licensees, the Directors are of the view that
it is reasonable to assume that certain such milestones will be received.
The Forecast also includes certain key assumptions with respect to the cash outflows of the Company, particularly with respect to the
estimated timing and cost to completion of known clinical trial activity undertaken by third parties on behalf of the Company. Whilst the
Directors have made reasonable enquiries as to the factors affecting cash outflows anticipated in meeting the liabilities associated with
such activity, these amounts are uncertain and could vary from those forecast.
Following the announcement of results from two large Phase III studies in April 2008 and July 2008, clinical trial activity has
significantly reduced and, as a result, the Directors are in the process of rationalising headcount as well as implementing other cost
saving strategies as appropriate.
In addition, the Directors are currently in discussions with a number of parties regarding further commercialisation of the Group's
intellectual property assets, the successful conclusion of which would give rise to significant cash inflows to the Group, depending upon
the specific terms that are agreed. These inflows are not included in the Forecast, which has been prepared solely for the assessment of the
going concern basis of preparation of the financial information.
Having reviewed the Forecast, and having made reasonable enquiries in making the underlying assumptions, the status of commercial
negotiations and possible cost saving strategies, the Directors have a reasonable expectation that the Group will be able to meet its
liabilities as they fall due for the foreseeable future. It is on this basis that the Directors consider it appropriate to prepare the
Group's interim financial information on the going concern basis. However, for the reasons described above, as at the date of this
announcement there exist material uncertainties which may cast doubt about the Group's ability to continue as a going concern and therefore
that it may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial information does
not include any adjustments which may be necessary if the Group were unable to continue to operate.
Copies of the interim statement for the six months ended 30 June 2008 are being sent to all shareholders. Details can also be found on
the Company's website at www.alizyme.com. Further copies of the interim statement and copies of the full financial statements for the year
ended 31 December 2007 can be obtained by writing to the Company Secretary at Alizyme plc, Granta Park, Great Abington, Cambridge, CB21 6GX,
United Kingdom.
2 Segmental reporting
The Directors consider there to be one business segment for reporting purposes as the Group conducts one business activity and operates
from one location, where all net assets are located, in the United Kingdom. The revenue and loss on ordinary activities before taxation
derive from the Group's principal activity in the United Kingdom.
3 Significant accounting policies
The significant accounting policies adopted in the preparation of the interim financial statements and methods of computation are
consistent with those used in the preparation of the Group's financial statements for the year ended 31 December 2007.
4 Accounting estimates
There were no estimated amounts reported in the current or prior periods.
5 Seasonality
The business of the Group is not subject to seasonal changes.
6 Revenue
In November 2007, Alizyme Therapeutics Limited, a subsidiary of the Company, received an upfront payment of US$2,500,000 (�1,208,000)
under a licence and development agreement with Prometheus Laboratories Inc. Under this agreement, Alizyme Therapeutics Limited has
obligations until December 2022. Accordingly, this income is recognised on a straight-line basis over the period from November 2007 to
December 2022. �40,000 has been recognised in the period and �13,000 in the year ended 31 December 2007, whilst the balance of �1,155,000 is
deferred revenue.
In June 2008, Alizyme Therapeutics Limited received an upfront payment of EUR2,000,000 (�1,582,000) under a licence and development
agreement with Norgine BV. Under this agreement, Alizyme Therapeutics Limited has obligations until February 2023. Accordingly, this income
is recognised on a straight-line basis over the period from June 2008 to February 2023, giving rise to revenue of �9,000 in the period,
whilst the balance of �1,573,000 is deferred revenue.
There was no revenue for the six months ended 30 June 2007.
7 Loss per share
As at 30 June 2008 there were outstanding options over 6,507,590 ordinary shares (30 June 2007: 9,995,265 ordinary shares; 31 December
2007: 6,727,395 ordinary shares) in the Company. IAS 33 - "Earnings per Share" requires presentation of diluted earnings per share when a
company could be called upon to issue shares that would decrease net profit or increase net loss per share. Only options that are 'in the
money' are treated as dilutive and net loss per share would not be increased by the exercise of these options. Therefore no adjustment has
been made to dilute loss per share for any outstanding share options.
The calculation of basic and diluted loss per ordinary share is based on the loss of �8,919,000 for the six months ended 30 June 2008
(six months ended 30 June 2007: �12,341,000; year ended 31 December 2007: �31,245,000) and on 213,393,551 ordinary shares (six months ended
30 June 2007: 200,215,285 ordinary shares; year ended 31 December 2007: 200,366,909 ordinary shares) being the weighted average number of
ordinary shares in issue during the period.
8 Property, plant and equipment
During the period, the Group acquired fixed assets costing �1,000 (six months ended 30 June 2007: �172,000; year ended 31 December 2007:
�184,000).
9 Cash, cash equivalents and money market investments
30 June 30 June 31 December
2008 2007 2007
Audited
�000's �000's �000's
Money market investments 1,650 4,680 3,800
Cash and cash equivalents 6,026 14,413 2,002
__________________________________________
7,676 19,093 5,802
__________________________________________
10 Trade and other payables
30 June 30 June 31 December
2008 2007 2007
Audited
�000's �000's �000's
Trade payables 3,133 3,666 4,301
Other taxation and social security 104 78 243
Accruals 3,630 465 4,344
__________________________________________
6,867 4,209 8,888
__________________________________________
11 Long-term provisions
During the period, the Group has credited the income statement by �8,000 (six months ended 30 June 2007: debit �35,000; year ended 31
December 2007: credit �39,000) in relation to the provision for National Insurance on share option gains. None of the provision (six months
ended 30 June 2007: �9,000; year ended 31 December 2007: �37,000) was utilised during the period.
12 Share capital
During the period, the Company increased the authorised share capital from 275,000,000 ordinary shares of 2p each to 300,000,000
ordinary shares of 2p each.
In March 2008, the Company completed a placing raising �10.0 million gross of expenses (�9.3 million net), under which 20,033,352 new
ordinary shares of 2p each were issued at a price of 50.0p each.
13 Reconciliation of movements in equity shareholders' funds
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2008 2007 2007
Audited
�000's �000's �000's
Loss for the period (8,919) (12,341) (31,245)
Share-based payment 323 312 676
New ordinary shares issued net of 9,258 271 633
expenses
__________________________________________
Net increase/(decrease) in 662 (11,758) (29,936)
shareholders' funds
Opening equity shareholders' 498 30,434 30,434
funds
__________________________________________
Closing equity shareholders' 1,160 18,676 498
funds
__________________________________________
14 Contingent liabilities
As at 31 December 2007, the Group disclosed a contingent liability of �3,000,000 in relation to an amount payable to GlaxoSmithKline
after first regulatory approval of renzapride for sale in a major market. Following the decision to cease further development of renzapride
by Alizyme, this item is no longer recognised as a contingent liability. There are no other contingent liabilities.
15 Events after the balance sheet date
There were no significant events after the balance sheet date.
16 Related party transactions
The remuneration of the Directors, who are key management personnel of the Group, is set out below in aggregate for each of the
categories specified in IAS 24 - "Related Party Disclosures".
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2008 2007 2007
Audited
�000's �000's �000's
Short-term employee benefits and 412 332 792
fees
Non-Executive Directors' fees 105 105 210
Pension contributions 73 59 118
Share-based payment 145 138 260
__________________________________________
735 634 1,380
__________________________________________
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BCGDICUDGGII
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