ARYx provides additional clarification about operations

Dec 24 2010

ARYx Therapeutics, Inc. (NASDAQ:ARYX) today provided further clarification of its status as an operating company, including the on-going appointment of its officers on behalf of the Company. The NASDAQ Staff has requested additional clarification about the Company's operations in conjunction with their on-going consideration of the Company's eligibility for continued listing on The NASDAQ Capital Market. ARYx remains operational, with specific activities underway, which are designed to further the development and approval of naronapride, and to enhance the value of the Company's assets. In addition, four officers of ARYx remain in their respective roles as officers, appointed by the board of directors to operate the company in good standing. The officers' duties, as specified in the ARYx Charter, remain unchanged by the recent reorganization, including the change in their compensation methodology.

As previously announced, ARYx has substantially reduced its operating expenses as the Company awaits guidance from the Food and Drug Administration ("FDA") on the continued development of its product candidate for various gastrointestinal disorders, naronapride (see press releases of December 15, 2010 and December 21, 2010). Notwithstanding this reduction in operating costs, important functions remain operational and are performed by the Company's officers and by those former employees of ARYx who, as of December 15, 2010, are now providing needed services under executed consulting agreements. These activities include: regular, current communications with the FDA on matters related to the continued development of naronapride; maintenance of drug product necessary to execute the planned Phase 3 clinical trials on naronapride; maintenance of the 44,000 square foot facility housing ARYx, including the substantial equipment; active consultation with leading physicians and others about the continued development of naronapride in anticipation of FDA guidance; management of due diligence for those current and potential investors involved in the potential continued funding of the ARYx operations; and, the functioning of the Finance group.

While the Company is working toward regaining compliance with all applicable NASDAQ listing requirements, there can be no assurance that it will be able to do so or that its securities will continue to remain listed on The NASDAQ Stock Market. In addition, there is no assurance ARYx will be able to obtain necessary agreements from its secured creditors and the additional funding from investors needed to continue operations beyond 2010 and through to the receipt of the anticipated FDA guidance.