Alizyme pumps up R&D spending as 2006 shapes as its pivotal year
Drug developer Alizyme's (AZM.L) spending on research and development in 2005 almost tripled to £17.1m from 2004 as it edged all four of its products in clinical testing closer to commercialisation.
The higher R&D spend caused the loss after tax to widen to £16.7m in 2005 from £4.6m in '04, which has been funded out of reserves, the company said in a statement accompanying its annual results. It reported cash on hand of £30.8m at the end of the year, almost double 2004's closing balance, following a placing of shares in May 2005 that raised £30.7m.
It kept the lid on management and administration expenses, which were £1.4m in 2005, compared to £1.2m in the previous year.
Chairman, Sir Brian Richards said the company had "had another year of excellent progress, achieving significant milestones, and defining the potential of our development assets. We are now well positioned to exploit the commercial value inherent in our late stage product portfolio."
The most commercially exciting drug may well be its obesity and diabetes Cetilistat, which successfully came through its EU Phase IIb clinical trial in 612 obese diabetic patients and US Phase I pharmacokinetic/pharmacodynamic clinical trial in 80 obese subjects. It started Phase II clinical development in up to 450 clinically obese Japanese patients.
Its other drugs in development - the irritable bowel syndrome treatment Renzapride, ulcerative colitis treatment Colal-Pred, and anti-mucositis (a nasty side effect of chemotherapy) ATL-104 - all achieved significant milestones during the year.
Mr Richards said "All of these products have the potential to provide significant improvements to patient treatment, as well as being commercially significant, with some having blockbuster potential."
The sniff of a blockbuster
The sniff of a potential blockbuster - a drug that has sales of $1bn or more in a year - and the general shortage of new products within the big pharmaceutical companies have made Alizyme something of a stock market darling. It share price has been growing all year, adding 25% in the past month alone, to reach 183p on Thursday evening. It was just 95p 12 months ago. It's now a £300m company.
The share price shed 7%, 13p, to 170p after the release of the results on what was most likely profit taking. Several directors took the opportunity to cash in some options that accounted for about a third of the volume traded by lunchtime.
CEO Dr Richard Palmer (pictured) said the company's goal "has been to advance all aspects of each product appropriately and cost effectively, so as to produce data packages that meet global standards to support their development.
"As a result we now have two products in Phase III clinical trials, the last stage of clinical development before commercialisation, with a further product ready for Phase III clinical development, potentially commencing later in 2006.
"Our fourth product has successfully demonstrated 'proof of concept' in a clinical trial, opening up the potential for further development in a number of cancer patient populations."
Clearly, as Mr Richards said, 2006 will be a pivotal year for Alizyme as it seeks to exploit the commercial value inherent in the late stage product portfolio.
10th March 2006
