LONDON ¿ Alizyme plc, of Cambridge, which focuses on obesity and gastrointestinal disorders, is hoping to raise up to #12.3 million via a placing and open offer combined with a warrant issue.

The company, which is listed on London¿s Alternative Investment Market, said the funding will ¿progress its portfolio to the point where out-licensing agreements can be made.¿ It is placing 5.4 million units and offering 5.6 million units at 74 pence per unit to raise #8 million (US$12.5 million). Each unit consists of two ordinary shares and one warrant. The warrants can be exercised at 40 pence, potentially bringing in a further #4.3 million, between August 1999 and June 2000.

Alizyme announced the fund-raising as it published financial results for the year ended December 31, 1998, showing a loss for the year of #4.4 million, up from #3.1 million in 1997. Operating costs rose to #4.7 million, compared to #3.4 million. Of this, #4 million was spent on research and development. The company raised #5.5 million through a placing in May 1998, and ended the year with #3.7 million cash.

This year Alizyme has taken its first two compounds, ATL-1251 for the treatment of irritable bowel syndrome and ATL-2502 for the treatment of inflammatory bowel disease, into clinical trials. However, Phase I trials of another compound, ATL-101, for the treatment of mucositis have been delayed because of manufacturing problems.

Alizyme Chairman Brian Richards said, ¿Despite the delay incurred, the commercial potential for an effective product for the treatment of mucositis remains high, particularly as potentially competing products . . . were dropped during the year.¿

The company also has moved its lipase inhibitor program, AZM-119, into preclinical development. Alizyme said it is the only company other than Hoffmann-La Roche to be working on lipase inhibition in the treatment of obesity.

CEO Richard Palmer said the early sales data of Roche¿s Xenical suggest it could be a blockbuster. ¿The progress we have made with this program, including the filing of two additional patent applications and the recent identification of a development candidate, offers the prospect of being second to market in the highly significant commercial area,¿ he said.