Ixico Regulatory News (IXI)

16 February 2012

Interim Management Statement

Phytopharm plc (PYM: London Stock Exchange) ("Phytopharm", the "Group" or the "Company") today issues its Interim Management Statement ("IMS") which relates to the period from 1 October 2011 to 16 February 2012 and contains information up to the date of publication of this IMS.

Highlights for the period

·; Cogane™ demonstrated efficacy in a genetic preclinical model of amyotrophic lateral sclerosis (ALS).

·; Dr Ian Tulloch, former Global Product Marketing Director at Novartis Pharma AG appointed as a Non-Executive Board Director. Dr Tulloch will succeed Mr Sandy Morrison who will step down as a Non-Executive Board Director following the Company's 2012 Annual General Meeting.

·; Recruitment of patients with Parkinson's disease (PD) into the multi-national Cogane™ Phase II dose ranging study (CONFIDENT-PD) is ongoing.

Cogane™ in Parkinson's disease

Parkinson's disease is a movement disorder characterised by muscle rigidity, tremor and a slowing of physical movement (bradykinesia) and, in extreme cases, a loss of physical movement (akinesia). The primary symptoms are the result of altered signalling in an area of the brain, the striatum, responsible for the control of movement. This is caused by degeneration of dopaminergic neurones between the substantia nigra and the striatum parts of the brain, leading to insufficient formation and action of dopamine. Parkinson's disease is therefore termed a neurodegenerative disease. The disease is slow in onset and the appearance of symptoms reflects the gradual loss of dopaminergic neurones.

Progress to date

CoganeTM is currently being evaluated in a 400 patient multi-national Phase II, randomised, double blind, placebo controlled, dose ranging study (CONFIDENT-PD). The study has been designed to compare the safety, tolerability and efficacy of three doses of CoganeTM and placebo when administered for 28 weeks to untreated patients with early stage PD. The study will assess the efficacy of Cogane™ in the treatment of both motor and non‑motor symptoms of Parkinson's disease. Recruitment into the study is ongoing and 75% of the target numbers of patients have now been recruited. It is anticipated that, if current rates are maintained, recruitment will close in Spring 2012, at which time more definitive guidance will be given with regard to the availability of headline results from the study. Our target remains to have headline data from the study available around the end of 2012.

The profile of Cogane™ suggests that it has the potential to benefit both the motor and non-motor symptoms of Parkinson's disease. In addition its effect on restoring damaged neurones to a functioning state implies that it might result in a delay in the progression of disease when administered in the early disease process.

Data from preclinical models also indicates that Cogane™ administered in conjunction with L‑DOPA shows additional benefit over L‑DOPA alone and that Cogane™ reduces the side effects associated with L‑DOPA. If these effects of improved efficacy and reduced side effects of L‑DOPA by co-administration of Cogane™ are also observed in patients, this will have significant benefit in the management of patients with more severe disease.

Cogane™ in motor neurone disease / ALS

ALS is the most common form of motor neurone disease, a neurodegenerative disease with limited treatment options and poor prognosis.. It is characterised by progressive loss of both lower (spinal cord and brain stem) and upper (cerebral cortex) motor neurones, which leads to severe muscle weakness and wasting, followed by paralysis. Death is caused by respiratory failure. There is an urgent need for the development of new approaches to this devastating condition.

Furthermore, ALS is an orphan indication, a classification which supports expedited clinical development. Cogane™ has recently been granted Orphan Drug status by both the European Commission and by the US Food & Drug Administration for development in ALS. Orphan status allows significant access to the regulatory authorities for advice and expedited clinical progression as well as providing financial advantages.

Progress to date

Preliminary data indicating that Cogane™ has demonstrated efficacy in a genetic model of ALS were announced in January 2012. The study was performed in a model that has a mutation in the SOD1 gene (SOD1G93A); mutation of the SOD1 gene is a known cause of ALS in humans. In this study Cogane™ was administered orally for 50 days, commencing after ALS‑type symptoms were manifest. This is therefore considered to be a model of severe, late-stage ALS.

Main findings:

·; Administration of Cogane™ resulted in a statistically significant 30‑50% improvement in muscle strength in one muscle type compared to both the untreated control group and a group treated with riluzole (currently the only product marketed for the treatment of ALS).

·; Treatment with CoganeTM also resulted in an increase in the number of motor units (a measure of functional motor neurones) compared with both the untreated and riluzole treated control groups.

·; Treatment effects were less clear in a second muscle type which was more severely damaged in the model, though the group treated with Cogane™ again showed an improvement in strength compared to the riluzole treated group.

These are preliminary, headline results and the full results from the study, including histopathology data, will be published later this year..

These results support those reported previously by Phytopharm in which Cogane™ showed benefit in an environmental (toxin-induced) model of ALS, in a progressive motor neuropathy model and in a nerve crush model. Collectively the results from these four different models of ALS provide strong support for the utility of Cogane™ in the treatment of this condition.

Myogane™ in glaucoma

Myogane™ has been shown to modulate the production of neurotrophic factors in a number of cell types and to have beneficial neuroprotective and neurorestorative effects on retinal ganglion cells, the cells which degenerate in glaucoma. Myogane™ is currently being evaluated in an in vivo preclinical model of glaucoma. The in-life phase of the model has taken longer than anticipated and consequently results are now expected in April 2012. As Myogane™ has already been tested in standard preclinical safety studies the project has the potential, subject to funding, to progress rapidly into clinical development.

P61 in Inflammatory Disease

The P61 programme, was established to investigate the known pharmacological properties of curcumin and gingerol. P61 is a series of novel new chemical entities ("NCEs") which exhibit anti-inflammatory, anti-remodelling, anti-spasmodic and TRPV1 channel modulating activities. This range of activity within single molecules could provide attractive therapeutic options for a number of inflammatory diseases including chronic obstructive pulmonary disease, asthma, atopic dermatitis, psoriasis, gastrointestinal inflammatory conditions and pain. A lead compound has been identified and is being characterised to better understand its pharmaceutical potential.

Legacy Programmes

Hoodia

The Council for Scientific and Industrial Research, South Africa continues to evaluate the potential of Hoodia gordonii as an appetite suppressant and is reviewing the data from the clinical studies conducted to date in order to determine an appropriate development programme.

Phytopica®

We have recently signed a global licence agreement for Phytopica® with a Chinese company, Hebei Meiwei Chinese Medicinal Herbs Limited. Phytopharm retains a commercial interest in the project and will receive a proportion of any future commercial milestones and royalties from the project following a period of further product development by Hebei Meiwei.

Finance

Our financial performance from 1 October 2011 to date has been in line with our expectations. Recruitment onto the CONFIDENT-PD clinical study is ongoing and we look forward to continuing the development of our pharmaceutical pipeline during 2012. This development work will also include the completion of the investigations into the effects of Cogane™ in ALS and Myogane™ in glaucoma. We also expect to complete the current phase of the P61 programmes.

In adherence to our virtual operational structure, we will continue to outsource the majority of our operations to specialist external organisations enabling us to operate with a low headcount and minimal infrastructure. Efficiency and cost control continue to be a key focus. Our lean operational structure continues to provide substantial cost and technical benefits as the nature and range of our activities evolve in tandem with our programmes' progress through the various stages of development. Based on our current expectations Phytopharm is financed to the end of 2013.

Notes to Editors

Phytopharm plc

Phytopharm is a development stage pharmaceutical company developing novel treatments targeting diseases with high levels of unmet need. Our lead series of compounds, the sapogenins (including Cogane™ and Myogane™), has the potential to be a new class of therapy for neurodegenerative diseases including Parkinson's disease, amyotrophic lateral sclerosis (ALS) and glaucoma.

Phytopharm operates as a virtual company ensuring the majority of our financial resources are focussed on our pharmaceutical pipeline. We utilise a network of scientific and clinical experts to help guide our development projects with our experienced pharmaceutical managers overseeing operations.

Our commercially focused development projects have the potential to produce significant treatment advances in our target areas of neurodegeneration and inflammatory disease. Our products are single chemical entities with novel mechanisms of action protected by strong patent families. Our pipeline has been sourced from our own research activities and from licensing activities, particularly from leading research institutions in China with whom the Company has long-standing relationships. We will consider adding additional products to our pharmaceutical pipeline if suitable candidates are identified.

Our objective is to develop products aimed at major markets with high unmet medical need to key value inflection points before seeking late-stage development and commercial partners as appropriate. We will consider retaining certain rights to products targeting orphan indications.

Phytopharm is listed on the Official List of the London Stock Exchange. Further information on Phytopharm is available from the Company's website www.phytopharm.com

The sapogenins

CoganeTM and MyoganeTM are structurally related, small molecule, chemical entities and members of the sapogenin class of compounds. They are orally bioavailable neurotrophic factor modulators that readily cross the blood-brain barrier. Both compounds have demonstrated neuroprotective effects in a range of preclinical models. Specifically, CoganeTM and MyoganeTM have been shown to induce and modulate the production of neurotrophic factors.

Both compounds have completed long term toxicology studies, have been formulated as once daily, orally administered therapies and have completed Phase I studies demonstrating good bioavailability and safety profiles.

The neuroprotective and neurotrophic actions of CoganeTM and Myogane™ suggest potential beneficial effects in other orphan neurodegenerative diseases.

Forward looking statements

Certain information included in these statements is forward looking and involves risk and uncertainties that could cause results to differ materially from those expressed or implied by the forward looking statements.

Forward looking statements include, without limitation, projections relating to the Group's plans and objectives for future operations, including future revenues, financial plans and expected expenditure and divestments. All forward looking statements in this report are based upon information known to the Group at the date of this release. The Group undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise.

It is not reasonably possible to itemise all of the many factors and specific events that could cause the Group's forward looking statements to be incorrect or that could otherwise have a material adverse effect on the future operations of the Group.