TIDMAZM
RNS Number : 2625P
Alizyme PLC
23 March 2009
Please note that there will be an analyst meeting commencing at 10.00 am at the
offices of Buchanan Communications, 45 Moorfields, London, EC2Y 9AE. Running
simultaneously to this is a webcast and conference call facility. To connect to
the webcast, please go to:
http://mediaserve.buchanan.uk.com/webcasts/room8audio/lrframes.htm approximately
10 minutes (09:50 am) before the start of the briefing.
To join the conference call please dial :44 (0) 20 8609 1435. When prompted,
please enter pin code 608492#.
The presentation will also be available on Alizyme's website for replay shortly
after the conclusion of the presentation.
+-------------------------------------+-------------------------------------+
| For Immediate Release | 23 March 2009 |
+-------------------------------------+-------------------------------------+
ALIZYME PLC
UNAUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008
Cambridge UK, 23 March 2009: Alizyme plc ("Alizyme") (LSE: AZM) today announces
its unaudited preliminary results for the year ended 31 December 2008.
Highlights
Commercial
* COLAL-PRED - Licence agreement with Norgine for Europe and other territories;
EUR2.0 million upfront payment received
* Cetilistat - US$3.0 million milestone received from Takeda on entering Phase III
development in Japan
Operational
Cetilistat (obesity and type 2 diabetes)
* Successful results of Phase II study in Japan in obese diabetic patients
* Phase III development commenced in Japan
* Protocols of all three studies in the Phase III obesity programme now agreed
with FDA under SPA procedure
* FDA indicated a potential labelling for type 2 diabetes
COLAL-PRED (ulcerative colitis)
* Headline results reported for EU Phase III clinical trial in approximately 800
patients with active moderate to severe ulcerative colitis
* Phase II clinical development commenced in the US by Prometheus
* Phase I clinical development commenced in Japan by TSD
ATL-104 (mucositis)
* Preparations for Phase II study in patients being treated for head and neck
cancer ongoing
Renzapride (irritable bowel syndrome)
* Development by Alizyme discontinued
Financial
* Revenues of GBP1.9 million (2007: GBP0.01 million)
* Net loss after tax of GBP10.1 million (2007: GBP31.2 million)
* Cash, cash equivalents and money market investments of GBP2.2 million at 31
December 2008 (2007: GBP5.8 million)
* GBP10.0 million gross raised from shareholders in March 2008
* Cost saving measures introduced including reduction in headcount
Board changes
* Roger Lloyd and Richard de Souza appointed as Non-Executive Directors, with
effect from 1 April 2009
* Bill Edge to resign as Non-Executive Director, with effect from 1 April 2009
* Richard Forrest resigned as Non-Executive Director on 31 August 2008
* David Campbell resigned as Finance Director and Company Secretary on 5 September
2008
* Nick Blech appointed as Company Secretary on 5 September 2008
For further information, please contact:
+-------------------------------------+-------------------------------------+
| ALIZYME PLC | Tel: + 44 (0) 1223 896000 |
| Tim McCarthy, Chief Executive | |
| Officer | |
| | |
+-------------------------------------+-------------------------------------+
| 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
Chairman's Statement
I am pleased to report results for 2008 to our shareholders.
The past 12 months have seen almost unprecedented turmoil in the global
financial markets which have presented some unique challenges and opportunities
to all companies in the biotechnology industry. Against this background, Alizyme
has continued to execute its strategy of building a portfolio of revenue streams
combined with a flexible, low overhead business model in order to achieve its
objective of becoming a profitable, self-sustaining biopharmaceutical product
development company.
In this regard, in 2008 we secured a new commercial partnership for COLAL-PRED
and saw cetilistat move into Phase III clinical development in Japan. Both these
events led to the receipt of licensing income for Alizyme. There was also
continued progression in the clinical development of COLAL-PRED in both the US
and Japan by our partners Prometheus and TSD.
In the first half of 2008 we completed two Phase III studies. In line with our
established outsourcing business model, following completion of these studies,
ongoing research and development activity and expenditure have been
significantly reduced. As a consequence of this lower level of activity, staff
numbers have also been reduced, thereby lowering Alizyme's ongoing base level
cash requirements. Alizyme's ongoing research and development expertise is now
focused on supporting our partners in achieving our future licensing income
streams through the commercialisation of our products.
I welcome the appointments of Roger Lloyd and Richard de Souza to the Board as
Non-Executive Directors. I believe they will provide invaluable advice and
guidance in enabling Alizyme to pursue its strategy and achieve its corporate
objectives. On behalf of the Board I would like to thank Bill Edge, who is
stepping down from the Board, for his valued service to Alizyme. During the
year, David Campbell resigned as Finance Director and Company Secretary and
Richard Forrest resigned as Non-Executive Director. I also thank them on behalf
of the Board for their contribution to Alizyme. In addition to his role as Chief
Executive Officer, Tim McCarthy has assumed overall responsibility for the
finances of Alizyme and Nick Blech has been appointed Company Secretary.
The world's pharmaceutical industry is facing a challenging future as it deals
with patent expiries on blockbuster products, the ongoing need to renew product
pipelines, increasing regulatory costs and an uncertain economic environment.
All companies are having to be flexible in how they construct licensing deals in
these capital constrained markets and it is likely that the deals of the future
may be very different from those of the past. Alizyme recognises these
challenges and is being innovative in its current discussions with potential
partners as we look to sign new deals and commercialise our assets further.
Alizyme is well placed with its portfolio of patent protected products and low
operating costs to exploit its assets with its existing partners and to generate
additional sources of revenue through new deals in unlicensed territories across
its portfolio. I look forward to the future of Alizyme with confidence.
The Board wishes to express its appreciation to all our shareholders for their
continued support and to all the staff at Alizyme and our collaborators and
advisors for their significant contribution throughout 2008.
Sir Brian Richards CBE
Chairman
23 March 2009
Chief Executive's review
Overview
Alizyme has continued the progress made in 2007 into 2008 in commercialising its
assets.
In June 2008 Alizyme established a new commercial partnership, licensing
COLAL-PRED to Norgine BV ("Norgine") for Europe and other territories,
resulting in an upfront payment of EUR2.0 million. Takeda Pharmaceutical Company
Limited ("Takeda"), our partner for cetilistat in Japan, progressed cetilistat
into Phase III development, triggering a milestone payment of US$3.0 million in
September 2008. Alizyme now has three licence agreements in place which have
each generated revenues in the last 18 months. Going forward, these licence
agreements will generate substantial further revenues on the achievement of
certain milestones and events, as well as royalties on product sales.
Following the completion in 2008 of Alizyme sponsored clinical trials, the
majority of future R&D expenditure is now being borne by our commercial
partners. With the benefit of multiple revenue streams, in conjunction with our
very low overhead cost base, we believe Alizyme is extremely well positioned to
achieve our aim of becoming a profitable biopharmaceutical product development
company leading to a self-sustaining financial profile.
Operational
Cetilistat
Alizyme's metabolic product, cetilistat, is being developed for the treatment of
obesity and type 2 diabetes.
In September 2008 Alizyme announced that, following a successful Phase II
study in obese diabetic patients, Takeda had decided to commence Phase III
development of cetilistat, triggering a US$3.0 million milestone. We announced
in December 2008 that the study had formally commenced.
Alizyme has now received four payments under the agreement with Takeda,
totalling US$10.0 million to date. In addition, Alizyme may receive further
development and sales milestones of up to US$32.0 million, as well as double
digit royalties on future sales in Japan. Takeda is responsible for all
development and commercialisation costs in Japan.
The potential revenue stream from the launch of cetilistat in Japan is
substantial. We have a number of discussions ongoing with potential commercial
partners for territories outside of Japan where the opportunity for additional
revenue streams for cetilistat is significantly greater.
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. This is a
very significant development as cetilistat, if approved for diabetes, would gain
access to the oral anti-diabetic market with its very high rates of
reimbursement, as well as the anti-obesity market, so greatly increasing its
sales potential.
The competitive environment has changed positively for cetilistat with the
withdrawal of the CB-1 antagonist rimonabant (Acomplia ) from the market, and
the abandonment of other CB-1 antagonists in development due to concerns over
the safety of this class of molecule. For any anti-obesity or anti-diabetic
medication that is likely to be given long-term, possibly for life, the safety
of the drug is absolutely paramount. A drug such as cetilistat has an inherent
safety advantage over centrally acting drugs as it acts locally in the
gastrointestinal tract. Cetilistat is therefore very well placed to secure a
significant proportion of the future obesity and type 2 diabetes markets due to
its excellent safety profile.
COLAL-PRED
COLAL-PRED is a proprietary gastrointestinal product developed by Alizyme for
the treatment of ulcerative colitis ("UC").
Alizyme has partnerships with Norgine, Prometheus Laboratories Inc
("Prometheus") and TSD Japan Inc ("TSD") for the development and
commercialisation of COLAL-PRED .
In June 2008 Alizyme entered into an agreement with Norgine, a leading European
specialty pharmaceutical company with a focus on gastroenterology, for the
development and marketing of COLAL?PRED in Europe, South Africa, Australia and
New Zealand. Alizyme received an upfront payment of EUR2.0 million and a further
EUR40.75 million may be received from Norgine by Alizyme on the achievement of
future development and sales milestones, as well as double digit royalty rates
that increase with higher annual net sales levels. Norgine is responsible for
all commercialisation costs.
Alizyme entered into an agreement with Prometheus for the development of
COLAL-PRED in North America in November 2007, receiving an upfront payment of
US$2.5 million. Under that agreement a further US$15.0 million could be received
from Prometheus by Alizyme on the product achieving future development
milestones as well as royalty rates which increase with higher annual net sales.
Prometheus is primarily responsible for clinical development costs for the
licensed territory. Prometheus commenced Phase II clinical development for the
treatment of UC in the US in May 2008.
Alizyme entered into an agreement with TSD for the co-development of COLAL-PRED
in Japan in December 2007. Under that agreement TSD is predominantly responsible
for Phase I and Phase II clinical development costs, and all future milestones
and any royalties earned in Japan would be shared equally between Alizyme and
TSD. In November 2008 we reported that TSD had commenced Phase I development of
COLAL-PRED in Japan.
Alizyme is also in discussions in relation to commercialising this product in
territories where it is not currently licensed to commercial partners.
In July 2008 Alizyme reported trial results for its European Phase III study of
COLAL-PRED in the treatment of acute UC. COLAL-PRED demonstrated superior
safety and superior combined safety and efficacy compared to conventional oral
prednisolone. A co-primary endpoint based on the Disease Activity Index ("DAI")
of efficacy of COLAL-PRED compared with the efficacy of 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 (Simple Clinical Colitis Activity
Index ("SCCAI") score). In addition, the results confirm the potential of
COLAL-PRED for long term use in the maintenance of remission of UC which is not
possible with conventional corticosteroids. The strategy for the submission of
the EU Marketing Authorisation Application ("MAA") is being progressed with
Norgine in conjunction with ongoing discussions with regulatory authorities.
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.
In a Phase IIa 'proof of concept' clinical trial in patients with lymphoma and
myeloma, ATL-104 has been shown to be safe and well tolerated, and demonstrated
a significant reduction in the duration of severe mucositis. Preparations are
ongoing for the next phase of clinical development of ATL-104, a study in
patients being treated for head and neck cancer. Additionally the manufacturing
technology will be transferred to a commercial facility in preparation for
manufacturing scale-up for Phase III clinical trials and commercial supply.
These activities will continue when financial resources permit.
Alizyme is progressing discussions with a number of potential licence partners
for this product.
Renzapride
In April 2008, the development of renzapride was discontinued following results
of the Phase III study.
Financial
The financial information for the year ended 31 December 2008 is presented in
accordance with the Group's accounting policies based on International Financial
Reporting Standards ("IFRS") as adopted by the European Union.
Results of operations
Loss for the year
We report a loss after tax of GBP10,060,000 for the year ended 31 December 2008
(H1 2008: GBP8,919,000; H2 2008: GBP1,141,000; 2007: GBP31,245,000), which is to
be set against reserves. The loss in any financial period continues to be a
direct reflection of the level of research and development activity in that
period.Alizyme's outsourcing business model combines low fixed overheads with a
variable and controllable level of investment appropriate to the activities,
particularly clinical trials, involved in progressing our products through their
late stage development. The reduction in the loss for 2008 compared to that for
2007 and the reduction in the loss for the second half of 2008 when compared to
the loss for the first half of 2008, demonstrates the effect of the reduction in
clinical trial activity during the year. There are no ongoing clinical trials
sponsored by Alizyme, therefore current research and development expenditure is
much lower.
Revenue
The cash receipts during the year which related to upfront and milestone
payments arising from partnerships totalled GBP3,294,000 (H1 2008: GBP1,582,000;
H2 2008: GBP1,712,000; 2007: GBP1,208,000).
In line with Alizyme's accounting policies, revenues of GBP1,855,000 were
recognised for the year (H1 2008: GBP49,000; H2 2008: GBP1,806,000; 2007:
GBP13,000), derived as follows:
Revenue of GBP1,712,000 was recognised in full in respect of a US$3,000,000
milestone payment received from Takeda during the year following Takeda's
decision to commence Phase III development of cetilistat in Japan. This revenue
was received in September 2008.
Revenues of GBP143,000 were also recognised, relating to the US$2,500,000
(GBP1,208,000) up front payment received from Prometheus in November 2007 and
the EUR2,000,000 (GBP1,582,000) received from Norgine in June 2008.
In 2007 revenues of GBP13,000 were recognised, relating to the up front payment
received from Prometheus.
Research and development
Research and development expenditure for the year was GBP11,225,000 (H1 2008:
GBP8,770,000; H2 2008: GBP2,455,000; 2007: GBP31,136,000). This reflects the
reduced activity associated with completion of two Phase III clinical studies in
the first half of the year compared to both studies ongoing throughout 2007,
which gave rise to the highest annual R&D expenditure in Alizyme's
history. Alizyme's outsourcing model means that with no ongoing clinical
studies, research and development expenditure has been substantially reduced.
Total management and administration costs
Management and administration expenses in 2008 were GBP1,773,000 (H1 2008:
GBP725,000; H2 2008: GBP1,048,000; 2007: GBP1,713,000).
Share-based payment costs were GBP602,000 (H1 2008: GBP323,000; H2 2008:
GBP279,000; 2007: GBP676,000).
During the year, the Directors implemented measures to reduce ongoing overhead
costs, including reducing the number of staff. Headcount reduced from 23 to 13.
Included in the second half of 2008 were one-off costs of GBP538,000 associated
with termination of employment. The Executive Directors have not been awarded a
bonus for 2008, or any increase in remuneration for 2009. Non-Executive Director
fees were similarly frozen at 2008 levels. In addition, the Executive Directors
have waived their entitlement to share awards under The Alizyme plc 2007
Deferred Bonus Plan relating to the bonuses awarded for 2007.
Furthermore, in order to ensure that overall Board remuneration is in line with
the generally reduced costs going forward, all Directors have waived one-third
of their entitlement to remuneration and fees, with effect from 1 April 2009.
Interest
Interest receivable was GBP252,000 (H1 2008: GBP185,000; H2 2008: GBP67,000;
2007: GBP845,000). Lower receipts in 2008 were due to lower levels of funds on
deposit and reductions in interest rates.
Foreign exchange loss
During the year, foreign exchange losses were nil (H1 2008: GBP21,000 loss; H2
2008: GBP21,000 gain; 2007: GBP36,000 loss) arising as a consequence of the
volatility in exchange rates during the year.
Taxation
The research and development tax credit for 2008 amounted to GBP1,433,000 (H1
2008: GBP686,000; H2 2008: GBP747,000; 2007: GBP1,458,000). Of this amount,
GBP1,412,000 was receivable at the year end (2007: GBP1,458,000) and was
received in February 2009.
Liquidity, cash, cash equivalents and money market investments
The net cash outflow from operating activities was GBP13,236,000 (H1 2008:
GBP7,516,000; H2 2008: GBP5,720,000; 2007: GBP23,238,000), primarily reflecting
the development activity arising from the two Phase III clinical trials which
were ongoing throughout 2007 and completed during 2008. Cash and cash
equivalents and money market investments totalled GBP2,185,000 at 31 December
2008 (2007: GBP5,802,000).
Following completion of Phase III studies for renzapride and COLAL-PRED during
the year, the ongoing clinical trial activity has significantly reduced and, as
a result, the Directors have rationalised headcount as well as implemented other
cost reduction strategies as appropriate, thereby reducing the Company's base
level cash requirements.
Dividend
The Directors do not recommend the payment of a dividend (2007: nil).
Going concern
The preliminary results have been prepared on a going concern basis, relying on
assumptions about receipt of income from future milestones under existing
licence agreements, as explained in note 2 to the financial information. 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. Thus these events and conditions
represent a material uncertainty over the profile of the Group's future cash
flows and therefore may cast significant doubt about its ability to continue as
a going concern. After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. For this reason, the Directors continue to
adopt the going concern basis in preparing the financial information.
Summary and outlook
We continue to move forward towards our objective of building a company with
multiple sources of revenue from different commercial partners and products.
I believe that Alizyme is unique in its combination of existing commercial
partnerships with established revenue streams, the opportunity to establish
additional sources of revenue through exploiting its products with further deals
and a virtual business model with low overheads.
We also have the benefit of a highly experienced and dedicated team at the core
of Alizyme driving it forward.
It is for these reasons that I look forward to the future with increasing
confidence in achieving our ultimate objective of becoming a profitable,
self-sustaining, biopharmaceutical product development company.
Tim McCarthy
Chief Executive Officer
23 March 2009
Consolidated income statement
For the year ended 31 December 2008
Unaudited
+--------------------------------------------+-------+------------+------------+
| | | 2008 | 2007 |
+--------------------------------------------+-------+------------+------------+
| |Notes | GBP000's | GBP000's |
+--------------------------------------------+-------+------------+------------+
| Revenue | | 1,855 | 13 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Operating expenses | | | |
+--------------------------------------------+-------+------------+------------+
| Research and development expenses | | (11,225) | (31,136) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Management and administration excluding | | (1,773) | (1,713) |
| share-based payment charge | | | |
+--------------------------------------------+-------+------------+------------+
| Share-based payment | | (602) | (676) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Total management and administration | | (2,375) | (2,389) |
| expenses | | | |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Total operating expenses | | (13,600) | (33,525) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Operating loss | | (11,745) | (33,512) |
+--------------------------------------------+-------+------------+------------+
| Investment income | | 252 | 845 |
+--------------------------------------------+-------+------------+------------+
| Loss on foreign exchange transactions | | - | (36) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Loss on ordinary activities before | | (11,493) | (32,703) |
| taxation | | | |
+--------------------------------------------+-------+------------+------------+
| Taxation on loss on ordinary activities | | 1,433 | 1,458 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Loss for the financial year being the | | (10,060) | (31,245) |
| retained loss for the year attributed to | | | |
| the members of Alizyme plc | | | |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Loss per share for the year - basic and | 3 | (4.6)p | (15.6)p |
| diluted | | | |
+--------------------------------------------+-------+------------+------------+
All amounts relate to continuing activities.
Consolidated balance sheet
As at 31 December 2008
Unaudited
+--------------------------------------------+-------+------------+------------+
| | | 2008 | 2007 |
+--------------------------------------------+-------+------------+------------+
| |Notes | GBP000's | GBP000's |
+--------------------------------------------+-------+------------+------------+
| Non-current assets | | | |
+--------------------------------------------+-------+------------+------------+
| Property, plant and equipment | | 90 | 176 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Current assets | | | |
+--------------------------------------------+-------+------------+------------+
| Research and development tax credit | | 1,412 | 1,458 |
| receivable | | | |
+--------------------------------------------+-------+------------+------------+
| Prepayments | | 1,587 | 2,673 |
+--------------------------------------------+-------+------------+------------+
| Accrued income | | - | 82 |
+--------------------------------------------+-------+------------+------------+
| Other receivables | | 25 | 398 |
+--------------------------------------------+-------+------------+------------+
| Money market investments | 4 | - | 3,800 |
+--------------------------------------------+-------+------------+------------+
| Cash and cash equivalents | 4 | 2,185 | 2,002 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| | | 5,209 | 10,413 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Current liabilities | | | |
+--------------------------------------------+-------+------------+------------+
| Trade and other payables | | (2,337) | (8,888) |
+--------------------------------------------+-------+------------+------------+
| Deferred revenue | | (187) | (80) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| | | (2,524) | (8,968) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Net current assets | | 2,685 | 1,445 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Total assets less current liabilities | | 2,775 | 1,621 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Non-current liabilities | | | |
+--------------------------------------------+-------+------------+------------+
| Deferred revenue | | (2,447) | (1,115) |
+--------------------------------------------+-------+------------+------------+
| Long-term provisions | | - | (8) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| | | (2,447) | (1,123) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Net assets | | 328 | 498 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Equity | | | |
+--------------------------------------------+-------+------------+------------+
| Share capital | | 4,422 | 4,021 |
+--------------------------------------------+-------+------------+------------+
| Share premium account | | 116,599 | 107,712 |
+--------------------------------------------+-------+------------+------------+
| Capital reserve | | 1,530 | 1,530 |
+--------------------------------------------+-------+------------+------------+
| Share-based payment reserve | | 3,144 | 2,542 |
+--------------------------------------------+-------+------------+------------+
| Retained loss | | (125,367) | (115,307) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Total equity | 5 | 328 | 498 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
Consolidated statement of changes in equity
For the year ended 31 December 2008
Unaudited
+---------------------+----------+----------+----------+--------------+-----------+----------+
| | Share | Share | Capital | Share-based | Retained | Total |
| | capital | premium | reserve | payment | loss | GBP000's |
| | GBP000's | account | GBP000's | reserve | GBP000's | |
| | | GBP000's | | GBP000's | | |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| Balance as at | 3,994 | 107,106 | 1,530 | 1,866 | (84,062) | 30,434 |
| 31 December 2006 | | | | | | |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| Loss for the year | - | - | - | - | (31,245) | (31,245) |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| Share-based payment | - | - | - | 676 | - | 676 |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| Issue of share | 27 | 606 | - | - | - | 633 |
| capital | | | | | | |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| | _______ | _______ | _______ | ________ | _______ | _______ |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| Balance as at | 4,021 | 107,712 | 1,530 | 2,542 | (115,307) | 498 |
| 31 December 2007 | | | | | | |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| Loss for the year | - | - | - | - | (10,060) | (10,060) |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| Share-based payment | - | - | - | 602 | - | 602 |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| Issue of share | 401 | 8,887 | - | - | - | 9,288 |
| capital | | | | | | |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| | _______ | _______ | _______ | ________ | _______ | _______ |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| Balance as at | 4,422 | 116,599 | 1,530 | 3,144 | (125,367) | 328 |
| 31 December 2008 | | | | | | |
+---------------------+----------+----------+----------+--------------+-----------+----------+
| | _______ | _______ | _______ | ________ | _______ | _______ |
+---------------------+----------+----------+----------+--------------+-----------+----------+
Consolidated cash flow statement
For the year ended 31 December 2008
Unaudited
+--------------------------------------------+-------+------------+------------+
| | | 2008 | 2007 |
+--------------------------------------------+-------+------------+------------+
| |Notes | GBP000's | GBP000's |
+--------------------------------------------+-------+------------+------------+
| Operating activities | | | |
+--------------------------------------------+-------+------------+------------+
| Operating loss | | (11,745) | (33,512) |
+--------------------------------------------+-------+------------+------------+
| Depreciation charge | | 83 | 73 |
+--------------------------------------------+-------+------------+------------+
| Loss on disposal of fixed assets | | 6 | - |
+--------------------------------------------+-------+------------+------------+
| Decrease in accounts receivable | | 1,459 | 999 |
+--------------------------------------------+-------+------------+------------+
| (Decrease)/increase in accounts payable | | (6,551) | 6,288 |
+--------------------------------------------+-------+------------+------------+
| Increase in deferred revenue | | 1,439 | 1,195 |
+--------------------------------------------+-------+------------+------------+
| Decrease in provision | | (8) | (76) |
+--------------------------------------------+-------+------------+------------+
| Share-based payment expense | | 602 | 676 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Net cash outflow from operations | | (14,715) | (24,357) |
+--------------------------------------------+-------+------------+------------+
| Research and development tax credit | | 1,479 | 1,119 |
| received | | | |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Net cash outflow from operating activities | | (13,236) | (23,238) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Investing activities | | | |
+--------------------------------------------+-------+------------+------------+
| Interest received | | 334 | 879 |
+--------------------------------------------+-------+------------+------------+
| Net cash withdrawn from money market | | 3,800 | 1,500 |
| investments | | | |
+--------------------------------------------+-------+------------+------------+
| Purchase of property, plant and equipment | | (3) | (184) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Net cash inflow from investing activities | | 4,131 | 2,195 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Financing activities | | | |
+--------------------------------------------+-------+------------+------------+
| Proceeds on issue of ordinary share | | 9,288 | 633 |
| capital (net of expenses) | | | |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Net cash inflow from financing activities | | 9,288 | 633 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Net increase/(decrease) in cash and cash | | 183 | (20,410) |
| equivalents | | | |
+--------------------------------------------+-------+------------+------------+
| Cash and cash equivalents at beginning of | | 2,002 | 22,448 |
| year | | | |
+--------------------------------------------+-------+------------+------------+
| Effect of foreign exchange rate changes | | - | (36) |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
| Cash and cash equivalents at end of year | 4 | 2,185 | 2,002 |
+--------------------------------------------+-------+------------+------------+
| | | __________ | __________ |
+--------------------------------------------+-------+------------+------------+
1Financial information
The financial information set out in this unaudited preliminary statement does
not comprise Alizyme's statutory accounts within the meaning of section 240(5)
of the Companies Act 1985. The statutory accounts of Alizyme for the year ended
31 December 2008, currently unaudited, will be finalised on the basis of the
financial information presented by the Directors in this unaudited preliminary
statement and will be delivered to the Registrar of Companies for England and
Wales and will be published and sent to shareholders in due course.
Alizyme will produce its statutory accounts for the year ended 31 December 2008
in accordance with International Financial Reporting Standards ("IFRS") as
adopted by the European Union ("EU"). Whilst the financial information included
in this unaudited preliminary statement has been computed in accordance with
IFRS, this announcement does not itself contain sufficient information to comply
with IFRS.
The financial information set out in this unaudited preliminary statement
includes comparative figures that have been prepared on the same basis. The
auditors have reported on the financial statements for the year ended 31
December 2007 which were prepared under IFRS. Their report was unqualified and
did not contain any statements under s237(2) or (3) Companies Act 1985.
As explained in note 2 below, the financial information has been prepared on a
going concern basis. The auditors are yet to sign their report on the statutory
accounts for the year ended 31 December 2008 and have indicated that their audit
report will be modified by the inclusion of an emphasis of matter paragraph
which highlights the existence of a material uncertainty with respect to receipt
of income on achievement of certain milestones by third parties under existing
licence agreements that cast significant doubt on the Group's ability to
continue as a going concern.
This preliminary statement was approved by the Board on 23 March 2009.
2Basis of preparation - Going concern
In determining the appropriate basis of preparation of the financial
information, the Directors are required to consider whether the Group can
continue in operational existence for the foreseeable future.
The Group had cash and cash equivalents and money market investments of
GBP2,185,000 as at 31 December 2008 and incurred a loss of GBP10,060,000 for the
twelve months then ended. The Directors have prepared a detailed cash flow
forecast for the period ending 31 December 2010 ("the Forecast") that includes a
number of significant assumptions regarding income and expenditure.
The Forecast assumes receipt of income on achievement of certain 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 such income will be received.
Since the announcement of results from two large Phase III studies in April 2008
and July 2008, clinical trial activity and expenditure have significantly
reduced and, as a result, the Directors have rationalised headcount as well as
implemented 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 made reasonable enquiries in to the underlying
assumptions, 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
financial statements on the going concern basis. However, for the reasons
described above, as at the date of approval of the preliminary announcement,
there exists a material uncertainty which may cast significant 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 was unable to continue to operate.
3Loss per share
As at the year end there were outstanding options over 6,064,358 ordinary shares
(2007: 6,727,395 ordinary shares) in the Company and share awards over 1,937,330
ordinary shares (2007: nil) 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 or share awards.
The calculation of basic and diluted loss per ordinary share is based on the
loss after tax of GBP10,060,000 for the year ended 31 December 2008 (2007:
GBP31,245,000) and on 217,267,171 ordinary shares (2007: 200,366,909 ordinary
shares), being the weighted average number of ordinary shares in issue during
the year.
4Cash, cash equivalents and money market investments
+--------------------------------------------------+------------+------------+
| | 2008 | 2007 |
+--------------------------------------------------+------------+------------+
| | GBP000's | GBP000's |
+--------------------------------------------------+------------+------------+
| Money market investments | - | 3,800 |
+--------------------------------------------------+------------+------------+
| Cash and cash equivalents | 2,185 | 2,002 |
+--------------------------------------------------+------------+------------+
| | __________ | __________ |
+--------------------------------------------------+------------+------------+
| | 2,185 | 5,802 |
+--------------------------------------------------+------------+------------+
| | __________ | __________ |
+--------------------------------------------------+------------+------------+
5 Reconciliation of movements in Group shareholders' funds
+--------------------------------------------------+------------+------------+
| | 2008 | 2007 |
+--------------------------------------------------+------------+------------+
| | GBP000's | GBP000's |
+--------------------------------------------------+------------+------------+
| Loss for the year | (10,060) | (31,245) |
+--------------------------------------------------+------------+------------+
| Share-based payment | 602 | 676 |
+--------------------------------------------------+------------+------------+
| New ordinary shares issued net of expenses | 9,288 | 633 |
+--------------------------------------------------+------------+------------+
| | __________ | __________ |
+--------------------------------------------------+------------+------------+
| Net (decrease)/increase in shareholders' funds | (170) | (29,936) |
+--------------------------------------------------+------------+------------+
| Opening equity shareholders' funds | 498 | 30,434 |
+--------------------------------------------------+------------+------------+
| | __________ | __________ |
+--------------------------------------------------+------------+------------+
| Closing equity shareholders' funds | 328 | 498 |
+--------------------------------------------------+------------+------------+
| | __________ | __________ |
+--------------------------------------------------+------------+------------+
(Note: COLAL and COLAL-PREDare registered trademarks of Alizyme Therapeutics
Limited)
The identification of compounds for successful research, their progress through
development and the obtaining of regulatory approvals or authorisations before
marketing, manufacture and/or distribution of products is not certain or a
formality
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR JTMLTMMATBPL
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