Calzada to divest its Metabolic subsidiary

Calzada (ASX:CZD) has revealed plans to divest its wholly owned subsidiary Metabolic Pharmaceuticals though a sale, licence or back-door ASX listing.

Metabolic will require significant additional funds to support its further development of osteoarthritis treatment and supplement ingredient candidate AOD9604, the parent company said.

With Calzada focused on the development of its PolyNovo subsidiary’s NovoSorb technology, the company has decided that Calzada should not undertake this spending.

Calzada Chairman David Williams said the company will remain “open to maintaining a minority interest in the Metabolic business should we identify the right buyer or partner”.

Current Calzada CEO David Kenley has indicated that interests associated with him plan to make an offer to buy the subsidiary. He will thus to step down as CEO until the divestiture is completed. Acting Joint Managing Director Philip Powell will assume his responsibilities in the interim.

Metabolic’s AOD9604 is a peptide fragment derived from the C-terminus of human growth hormone. It has been declared generally recognised as safe in the US from clinical trials in obesity, allowing it to be added as a nutrient supplement in foods, drinks and dietary supplements.

The current development program is evaluating the peptide fragment as a treatment for osteoarthritis.

Calzada (ASX:CZD) shares were trading unchanged at $0.090 as of around 2 pm on Monday.