Shares in Alizyme PLC (LSE: AZM) plummeted after the pharma group announced its current funding is not expected to last beyond the end of August 2009 and it may face going into administration or liquidation.
Investors headed for the hills, leaving the stock languishing nearly 55 percent below its opening level by late afternoon.
Laizyme said material uncertainty has now arisen as to the receipt of milestone payments due from various parties in connection with licensing and development agreements for COLAL-PRED, a treatment of ulcerative colitis, a form of inflammatory bowel disease.
Funding obligations under these contracts for Alizyme are subject to potentially significant rises, and ongoing talks with various parties to mitigate the potential impact on the company are not progressing well.
The group is running out of cash in August unless it is able to raise additional funds. The company is in discussions with its advisers in relation to such funding.
Alizyme is reviewing the overall strategy and structure of the company, and is planning to make a significant number of its employees redundant.
It is also considering the suitability of the company's current main market listing given its market capitalisation and limited resources.
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