DRUG DEVELOPMENT group AGI Therapeutics said yesterday that it is carrying out a fundamental review of its business strategy. This following the decision last month to discontinue the development of its lead product Rezular, a treatment for irritable bowel syndrome, following disappointing clinical trial results.

In an update provided to shareholders at its annual general meeting (agm) yesterday, AGI said the review would involve an analysis of its “pipeline products” in order to decide how best to prioritise them.

Chief executive Dr John Devane explained that these products were “free-standing” and unaffected by the Rezular set-back. “We need to look at them hard and decide where is the greatest value to be achieved in the short-term,” he told The Irish Times.

He conceded that the Rezular result was a serious blow to the company.

“Because we’re a small company, all of us lived and breathed this product for quite a number of years, so it was a big blow to us individually but also as a business,” he said.

“That’s the nature of drug development companies. While of course it was very disappointing, we need to dust ourselves off now and . . . see to what extent other products justify themselves or not,” he added.

He pointed out that AGI is in a strong cash position. The company, which is listed on the IEX junior stock exchange in Dublin, expects to have cash resources of approximately $12 million at the end of the second quarter of 2009, after providing for the cost of closing out its Rezular trials and certain restructuring provisions.

The company’s share price rose by 8.33 per cent – or one cent – to €0.13 yesterday.