Alizyme gets green light for final trials of anti-obesity pill UPDATE
(recasts, adds detail, analyst comment, share price)
LONDON (AFX) - US medicine regulators have approved Alizyme PLC's plans for final-stage clinical trials of anti-obesity pill cetilistat, which will start in the first half of next year.
The agreement with the Food and Drug Administration paves the way for an eventual regulatory filing, and should help the small-cap British drug developer find a partner for the product.
The company needs a partner on board to pay for the remaining development programme, which it cannot currently afford on its own. Alizyme has said it intends to secure a deal this year, and talks are ongoing.
Cetilistat, an experimental treatment for obesity and related diseases such as Type II diabetes, is viewed by analysts as a future blockbuster product, with the potential to generate annual sales of more than 1 bln usd. It is Alizyme's most important asset.
The pill in the same class as GlaxoSmithKline PLC and Roche AG's Xenical, which is already on the market and generates annual sales of around 500 mln usd.
While analysts welcomed today's news, the delay to the start of phase III trials, which were previously due to begin this year, was seen as a disappointment.
Brett Pollard at Numis reduced his price target on the stock to 150 pence from 188 pence previously, because of the setback in potential launch date.
'The company does have a late stage portfolio but the lack of partnering activity is proving a drag on the share and we believe the company needs to deliver a deal soon to sure up cetilistat development or risk having to fund the project itself,' the analyst wrote this morning.
If trials do not start until May/June, rather than February/March, representing a delay of 3-6 months, that could hint at slow progress in licensing discussions, Sav Neophytou at Seymour Pierce commented.
'The eventual licensing of cetilistat is a key component of our investment thesis and without a strong partner in place the stock would be a sell.
'For the time being, we still think the efficacy profile of cetilistat in phase II trials should enable swift licensing now phase III trials have been confirmed with regulators,' he added, keeping a buy recommendation.
Cetilistat and Xenical are lipase, or fat, inhibitors. Trials have demonstrated cetilistat has fewer side effects than its rival.
That fact should help Alizyme sign up a partner, analysts believe.
'The scope of the FDA agreement on the development plan provides an efficient and effective pathway for approval of cetilistat for the management of obesity and related disease and will aid our discussions with potential partners for cetilistat' Alizyme's chief executive Dr Richard Palmer said in a statement this morning.
Talks are ongoing with European regulators.
At 9.45 am shares in the company were trading 2.5 pence, or 2.5 pct higher at 103, giving a market value of 187 mln stg. The stock has lost 18 pct so far this year, after touching a two-year high in March.
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