Ixico Regulatory News (IXI)

16 August 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 April 2012 to 16 August 2012 and contains information up to the date of publication of this IMS.

Highlights for the period

·; Recruitment into CONFIDENT-PD Phase II clinical study of Cogane™ in patients with Parkinson's disease completed in April 2012. Headline results from the study are expected in February 2013.

·; Cogane™ demonstrated efficacy in the "gold standard" preclinical model of amyotrophic lateral sclerosis (ALS, the most common form of motor neurone disease). Positive data has now been obtained in four models of ALS, providing a strong rationale for Cogane™ as a potential treatment for this devastating condition.

·; A study of Myogane™ in a preclinical model of glaucoma was inconclusive due to an unexpectedly low control response which prevented evaluation of a neuroprotective effect of Myogane™.

·; Preparation for a Phase I clinical study to evaluate Cogane™ solid dose formulations for up to 28 days has been initiated.

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

The preclinical neuroprotective profile of Cogane™ suggests that it will have benefit on both 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 in recently diagnosed patients.

CoganeTM is currently being evaluated in a multi-national Phase II, randomised, double blind, placebo controlled, dose ranging study (CONFIDENT-PD). The study is comparing the safety, tolerability and efficacy of three doses of CoganeTM and placebo when administered for 28 weeks to patients with untreated early stage Parkinson's disease. 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 completed in April 2012. It is anticipated that headline data from the study will be available in February 2013.

Data from preclinical models also indicates that in addition to its effectiveness as a monotherapy, Cogane™ administered in conjunction with L‑DOPA shows additional benefit over L‑DOPA alone. Other data suggests 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™ is administered in a liquid formulation in the current CONFIDENT-PD study. In parallel to this study the Company has been developing solid dose formations which it believes will be a more commercially attractive proposition to take forward into Phase III registration studies and onto the market. Preparation for a Phase I bioavailability clinical study has been initiated to assess the bioavailability of these solid dose formulations of Cogane™ in healthy volunteers for a period of up to 28 days. The results of the study are expected at end 2012 / early 2013.

Cogane™ in motor neurone disease / ALS

ALS, also known as Lou Gehrig's disease, is the most prevalent form of motor neurone disease which generally strikes people between 40 and 60 years of age. 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 and death, generally caused by respiratory failure. There is an urgent need for the development of new approaches to treat this devastating condition.

It is estimated that there are over 30,000 patients living with ALS in the seven major markets. ALS is classified as an orphan disease and, as such, offers the potential for expedited development.

Progress to date

A study of Cogane™ in the genetic "gold standard" in vivo model of ALS completed during the period. The model 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. The main findings from the study are:

·; Administration of Cogane™ resulted in a 30-50% improvement in muscle strength in one muscle type compared to both the untreated control group and a group treated with riluzole (the only currently approved treatment of ALS);

·; Treatment with Cogane™ 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 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; and

·; Histopathology data shows that administration of Cogane™ reduced the loss of spinal cord motor neurones by 39% compared with the number damaged in the untreated group (a statistically significant difference; p=0.008). Treatment with riluzole resulted in a 29% but not statistically significant reduction. Additionally, microscopic examination showed that Cogane™ protected muscle composition, supporting the results on muscle strength.

This study was performed by Professor Linda Greensmith's group at University College, London with the financial support of the Motor Neurone Disease Association, a UK based charitable organisation which provided a grant to cover the costs of the study.

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.

As Cogane™ is already in clinical trials for Parkinson's disease, rapid progression into efficacy indicating trials would be possible, subject to funding.

Cogane™ has been granted Orphan Drug status by both the European Commission and by the US Food & Drug Administration for development in ALS and this will allow significant access to the regulatory authorities for advice and expedited clinical progression as well as providing financial advantages.

Glaucoma

Current pharmacological treatments for glaucoma are predominantly focused on reducing the elevated intra ocular pressure ("IOP") in the eye, which is often associated with glaucoma. However, a significant number of patients with glaucoma do not exhibit raised IOP and, in addition, a significant number of patients whose IOP is successfully reduced still experience ongoing neurodegeneration resulting in deterioration of sight. It is therefore believed that there is a major unmet need and a commercial opportunity for products which could successfully treat the underlying neurodegenerative process in glaucoma.

Myogane™ has demonstrated neuroprotective effects in a range of preclinical models of neurodegenerative diseases. Specifically, 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.

The Company has completed a study with Myogane™ in an animal model of glaucoma that was inconclusive. The study did not yield a valid result because of an unexpectedly low level of neuronal cell death in the control group which prevented evaluation of the neuroprotective effect of Myogane™.

The study was designed to evaluate the neuroprotective effects of treatment with Myogane™ in an established model of glaucoma. In this model intraocular pressure is elevated in order to induce neuronal cell loss in the retina. The endpoint was a comparative measurement of neuronal cell loss. However, the extent of induced neuronal cell loss was much less than anticipated (from literature precedent) in the control group. While there were some indications of a neuroprotective effect following Myogane™treatment, it is not possible to draw definitive conclusions because of the limited neurodegeneration in the control group. Pharmacokinetic evaluation indicated that levels of Myogane™ in the plasma were broadly in line with that expected from previous studies and that Myogane™ was present in the retina. This study was performed with the financial support of the UK Technology Strategy Board. Further tests will be conducted in glaucoma when resources permit."

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 modulating activities. This range of activity within single molecules could provide attractive therapeutic options for a number of inflammatory diseases. A lead compound has been identified and is being characterised to better understand its pharmaceutical potential.

Finance

Our financial performance from 1 April 2012 to date continues to be in line with our expectations. Recruitment into CONFIDENT-PD completed in April 2012 and we look forward to the headline data which we expect in February 2013. We will also continue with the development of our remaining R & D programmes as planned.

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 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 (PD), amyotrophic lateral sclerosis ("ALS") and glaucoma.

Phytopharm operates as a virtual company ensuring the majority of our financial resources are focused 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.

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.

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

Cogane™ and Myogane™ 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, Cogane™ and Myogane™ 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.

CoganeTM is being studied in a Phase II trial of early stage Parkinson's disease. It has also been evaluated for safety and tolerability in patients with Alzheimer's disease.

Additionally, Cogane™ has been assessed in preclinical models of ALS. The positive results in the four models of ALS used provide strong support for the utility of Cogane™ in the treatment of this condition.

Myogane™ has been evaluated in a preclinical model of glaucoma, a neurodegenerative disease of the eye which did not yield a valid result because of a failure to induce sufficient neuronal cell loss in the control group. Data from this study will be further evaluated to determine the next steps for this programme.

The neuroprotective and neurotrophic actions of Cogane™ 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.