IPO FILING: ARYx Therapeutics, Inc. (ARYX, PG)

ARYx THERAPEUTICS, INC. has filed to raise up to $86.25 million in an IPO under the ticker "ARYX" on NASDAQ.  The biotech has secured Morgan Stanley, CIBC World Markets, Jefferies & Co, and Leerink Swann as its underwriters.

The company actually has a fairly unique model developing a portfolio of internally discovered product candidates designed to eliminate known safety issues associated with well-established, commercially successful drugs.  It uses its own "RetroMetabolic Drug Design" technology to design structurally unique molecules that retain the efficacy of these original drugs but are metabolized through a potentially safer pathway to avoid specific adverse side effects associated with these compounds.

The lead and most advanced product candidate, ATI-7505, is based on cisapride and has successfully completed Phase 2 clinical trials for the treatment of gastroesophageal reflux disease and symptoms associated with functional dyspepsia; its second product candidate, ATI-5923, is based on warfarin and is currently in Phase 2 proof-of-concept clinical trials for use as an anticoagulant to treat patients at risk for the formation of dangerous blood clots; its third product candidate, ATI-2042, is based on amiodarone and is in Phase 2 clinical trials for the treatment of atrial fibrillation, a form of irregular heartbeat.  Its targets are drug candidates targeting multi-billion dollar markets and it has a worldwide collaboration with Procter & Gamble Pharmaceuticals (NYSE:PG) for the development and commercialization of ATI-7505.

The company’s main revenues appear to be collaborative revenues from P&G as it has no products on the market, so it is still just in clinical stages.  Additional milestone revenue could reach approximately $391 million over the remaining life of the collaboration, of which approximately $216 million could be earned prior to commercialization.

Jon C. Ogg
August 31, 2007