BioWorld International Correspondent

LONDON - Alizyme plc entered its first license deal, granting rights to its anti-obesity treatment ATL 962 to Takeda Chemical Industries, Japan's largest pharmaceutical company, in a US$42 million deal.

Alizyme will receive $2 million up front, with the rest payable in milestones, the first of which would be reached in October when results of a European Phase IIb trial are due. The deal gives Cambridge-based Alizyme double-digit royalties on future sales in Japan, with all Japanese development costs being paid by Takeda.

Tim McCarthy, Alizyme finance director, told BioWorld International, "I don't think we could get a better partner for Japan. Even if we did a global deal with a major pharmaceutical company the Japanese market would be secondary, and I don't think anyone else could develop the Japanese market as well as Takeda."

Alizyme's shares rose 15.25 pence to 64.5 pence when the deal was announced Friday.

McCarthy said Alizyme decided to agree to a license in Japan in advance of the Phase IIb results after an approach from Takeda. "They were keen to acquire rights ahead of a Phase II auction. We were being courted by the No. 1 Japanese company, and we have sorted out a good deal that will not have any impact on the value of other licenses."

Takeda now is awaiting results of the Phase IIb in 370 patients at five centers in Europe before starting a Phase I trial in Japan. McCarthy said it is not clear if Takeda would be able to use any of the existing data in the Japanese development program. The deal includes the rights to develop ATL962, a lipase inhibitor, in related conditions, including Type II diabetes.

The deal marks Alizyme's first income. The company completed a fund-raising earlier this year, giving it sufficient cash to last until the end of 2004. McCarthy said the Takeda deal was not done from the position of needing money. "We could secure a good deal because we have money in the bank and didn't need to do it at this time. If the terms weren't right we would simply have walked away."

However, he added that the extra cash was significant psychologically. "It's the first commercial deal; the first income we have ever posted. The next milestone will be more money, and puts us in a stronger position in licensing ATL 962 when the Phase IIb results are known."

In the Phase Ib trial ATL 962 showed similar efficacy to orlistat, the active ingredient of F. Hoffmann-La Roche Ltd.'s anti-obesity treatment Xenical. McCarthy said Alizyme has talked to a number of companies that are interested in licensing ATL 962. "We won't discuss the details until we know the Phase IIb results, and that will take time, so I don't expect to complete a deal this year," he said.