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By Salamander Davoudi
Financial Times
September 20/September 21, 2003
Money and Business
Companies UK

ALIZYME

Anti-obesity breakthrough lifts Alizyme

Help at Hand: Alizyme's new anti-obesity drug has fewer gastronomic side effects and could aid up to 300m sufferes of obesity


Shares in Alizyme rose more than 40 per cent yesterday after the drugs discovery group reported that its anti-obesity drug, the holy grail of pharmaceuticals, was not only as effective as its rivals but also caused fewer gastro-intestinal side effects.

Phase II drug trials showed that 90 percent of 372 clinically obese patients tested over three months did not experience the uncomfortable side effects that existing treatments induce, including diarrhoea and incontinence.

Dr. RIchard Palmer, Alizyme's chief executive hoped that this selling point will allow the product to compete with ROche's Xenical, now the only obesity drug available.

Sam Fazeli, analyst at Nomura said: "If this drug is effective over the long-term, I believe it could make L600m to L700m annually in peak sales. Xenical was making SFr1bn (L446m) a year but has since slipped because of the side effects."

The World Health Organisation estimates that the economic costs of obesity range from 2 to 5 percent of the total costs of healthcare. Obesity is one of the world's biggest health problems in adults, with about 300m people affected.

Alizyme said it is now preparing for the final Phase III clinical trials and is seeking development partners for the drug for Europe and North America.

Julia Simmonds, analyst at Evolution Beeson Gregory, said: "This good news for the company as it makes the product a much more licensable opportunity because there is an attractive commercial differential when marketing it."

Small biotechnology companies often license late-state approval experimental drugs to bigger drug makers who help pay for the final-stage clinical trials and marketing in exchange for a slice of future sales.

The shares were up 34 1/4p to 114 1/2p yesterday.

FT Comment

  • It is impossible to put a figure on potential revenues for obesity drugs because they are so big. Alizyme has shown its product can significantly reduce side effects, which puts it in a competitive position with its rival, Xenical. It also means that the product will be easier to outsource, especially since the deal with Japan's biggest drugs group made Alizyme more credible to potential partners in other markets. It showed the company could od a deal. A rigorous approach in the Phase III testing process could bring untol benefits. This is certainly a stock to watch.

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