17 February 2009 - Phytopharm plc is today issuing its Interim Management Statement which relates to the three month period from 1 October 2008 to 31 December 2008 and contains information up to the date of publication of this IMS.
Refocusing and restructuring the business
During the 4th Quarter of 2008, Phytopharm continued to progress its development programmes and in particular CoganeTM. Our functional food programme was negatively impacted by the Unilever decision not to proceed with the Hoodia extract programme.
As a result Phytopharm has completed a major review of business strategy.
Phytopharm is now focusing on building shareholder value by effective progress of its innovative pharmaceutical programmes. These programmes will move forward with resources focused on the lead programme, Cogane™. The Company is looking to develop Cogane™ and Myogane™ by attracting non-dilutive funding to proof of concept, prior to establishing partnerships for later-phase clinical development and commercialisation. In parallel, out-licensing of Cogane™ and Myogane™ will be actively considered.
Additionally, in order to provide a stable financial platform for this development based strategy, Phytopharm is now well advanced in implementing an extensive restructuring of its business. This involves:
a substantial reduction of the Company’s headcount from 40 down to 25 posts, whilst continuing to pursue sources of non-dilutive funding;
and a cost saving programme.
As a result of strategic focus on the Cogane™ programme, expenditure on Phytopharm’s other programmes will be substantially reduced, resulting in a targeted reduction in the Company’s budgeted overall expenditure in the coming financial year of up to 20%.
The Company’s financial platform will be strengthened by the Board’s intention to develop further sources of non-dilutive funding. To this end the Senior Management Team is devoting considerable effort to generating such funding from specific charities, grant funding as well as other viable sources.
With the cost savings programme already initiated the Company expects to have sufficient cash resources to mid 2010. Success with non-dilutive funding will extend this timescale. There has been no significant change in the financial position or performance of the Company since the publication of the results of the year ended 30 September 2008.
Highlights for the period
Management -
Following the departure of the CEO and CFO in November 2008, Sandy Morrison, a non-executive director of the Company, was appointed Interim CEO. The Company has appointed Keith Thomson as Interim Chief Operating Officer / Chief Financial Officer (Board observer). Keith is a qualified chartered accountant (at KPMG) and experienced interim CEO and CFO with a background in technology, financial services, life sciences and research and development. In the meantime the interim CEO Sandy Morrison, and the interim COO / CFO, Keith Thomson, have been leading the Board review of the business.
A search for a new CEO has been initiated and it is expected that an appointment can be made in Q2 2009.
Pharmaceutical programmes
Cogane™ -
A submission for regulatory approval to commence a safety, tolerability and pharmacokinetic study in both healthy volunteers and Parkinson’s disease patients has been completed. This study could start in Q2 2009 if approval is granted. The Cogane™ pre-clinical in vivo efficacy studies initiated in early 2008, with significant financial support from the Michael J Fox Foundation, are progressing well.
Cogane™ is a neuroprotective and neurotrophic compound for the treatment of Parkinson’s disease.
Myogane™ -
This compound is also a neuroprotective and neurotrophic compound targeted at Amyotrophic Lateral Sclerosis (ALS), a form of Motor Neurone Disease. This project is in preparation for further clinical studies, pending a decision on funding.
The Company is in preliminary discussions with a potential partner for both Cogane™ and Myogane™. However, it is the Board’s current intention that the Company completes the planned clinical study with Cogane™ and progresses Myogane™ as funds permit, prior to agreeing a licensing deal.
Functional Foods
Hoodia Extract - In December 2008 a satisfactory Mutual Termination Agreement (MTA) was concluded with Unilever. Under this MTA the original IP rights have been restored to Phytopharm and access to Unilever Hoodia patents has been secured. In addition Phytopharm has secured access to the Hoodia supply chain (Hoodia extract and plantations).
The Company is still firmly committed to the potential benefits of Hoodia extract as a functional food targeting weight management and is in early stage discussions with a number of interested alternative partners. It is Phytopharm’s intention to find a partner or licence the Hoodia programme if a satisfactory business proposition emerges. In the meantime the Company intends to limit expenditure on this programme.
Phytopica® - Discussions are ongoing with Phytopharm’s marketing partner for Phytopica®, Intervet / Schering-Plough Animal Health, to increase sales and marketing support in existing markets, as well as launch of the product in new markets.
However we are also currently reviewing alternative strategies to take this programme forward. We expect to have completed this review by the end of June 2009.
Sandy Morrison, Interim CEO commented: ‘the past four months have been a challenging time for Phytopharm and we acknowledge the support and patience of staff, shareholders and advisors during this period. We now have a clear strategy focusing our resources on our innovative pharmaceutical programmes whilst pursuing alternative partnership arrangements for the Hoodia programme’.