ARYx Therapeutics to complete an out-licensing agreement for clinical development and commercialization of budiodarone

Oct 30 2009

ARYx Therapeutics, Inc. (NASDAQ:ARYX), a biopharmaceutical company, today announced that it has implemented a staffing plan to operate the company that anticipates licensing its lead development programs and resuming development of earlier stage product candidates. ARYx expects to complete an out-licensing agreement in the near term for the clinical development and commercialization of its oral anti-arrythmic agent, budiodarone, and, following that, entering into similar agreements for its two other late stage products, ATI-7505, for the treatment of various gastrointestinal disorders, and tecarfarin, an oral anticoagulant agent. The staffing changes impacted functions throughout ARYx and included a reduction in personnel from 73 employees to 56 employees. ARYx expects to record a charge of less than $500,000 in the fourth quarter of 2009 related to this reduction in personnel. This staffing reduction was accompanied by changes in the organizational structure to improve the efficiencies of operations.

“Implementing these decisions that include saying goodbye to hard-working and dedicated colleagues is always the toughest part of managing a business,” stated Dr. Paul Goddard, ARYx chairman and chief executive officer. “We are making these changes because over the past several years our staffing level has been appropriate to complete the highly successful Phase 2 clinical trial on budiodarone that has positioned the compound for licensing, as well as the Phase 2/3 clinical trial that enrolled over 600 patients testing the safety and efficacy of tecarfarin. As we out-license those programs, our level of personnel must now be appropriate for the demands of earlier stage compounds. We remain entirely dedicated to our strategy of internally discovering drug candidates that make proven therapies safer, and developing them sufficiently to attract a large pharmaceutical company partner for its final development and eventual commercialization. We sincerely thank each and every employee who has contributed to our success thus far and wish the best for those no longer with the company.”

In the partnering efforts for budiodarone, significant interest and activity by a number of large pharmaceutical companies continues and is accelerating, leading ARYx to believe that the compound will be partnered in the near term. As previously announced, ARYx has recently secured an up to $35 million committed equity financing facility to protect the company from the uncertainties related to the exact timing of a licensing deal on budiodarone.

“While we share the disappointment that a partnering deal on budiodarone has taken longer than projected, the momentum toward completion of a deal continues to grow,” added Dr. Goddard. “The recently secured equity line provides increased flexibility so we are able to get the right deal done with the right company, and we remain confident that a partnership will be completed in the near term. We believe our new staffing level allows us to continue to fully support this partnering effort and to take rapid advantage of the resources that will be available to us once the expected budiodarone deal is done. With that said, as we move closer to completing the partnering process and negotiating a final agreement, we will be providing fewer details about where we stand in order to achieve the best possible result with those companies competing for the compound.”