Open Offer

Phytopharm PLC
02 February 2005


EMBARGOED UNTIL 7.00 a.m.         2 February 2005





Not for release, publication or distribution, directly or indirectly, in or into
     the United States, Canada, Australia, Japan or the Republic of Ireland



                                 Phytopharm plc



    UK Placing, US Private Placement and Open Offer to raise £ 23.9 million



Phytopharm plc (LSE: PYM) ('Phytopharm') announces today that it proposes to
raise approximately £23.9 million (approximately £21.6 million net of expenses)
through a UK Placing, US Private Placement and Open Offer comprising an
aggregate of 13,261,446 New Ordinary Shares at the Issue Price of 180p per New
Ordinary Share. Qualifying Shareholders have the right to subscribe for their
pro rata entitlement in accordance with the terms of the Open Offer. The Issue
Price of 180p per New Ordinary Share represents a discount of 15p (7.7 per
cent.) to the closing middle market price of 195p per Ordinary Share trading on
the London Stock Exchange on 1 February 2005.



This is a significant equity fundraising for the Company and the New Ordinary
Shares to be issued pursuant to the Offering represent an increase of 30.8 per
cent. in the issued share capital of the Company.



Canaccord has agreed to underwrite the UK Placing, comprising an aggregate of
11,178,206 New Ordinary Shares, on the terms and conditions set out in the UK
Placing Agreement. The US Private Placement, comprising an aggregate of
2,083,240 New Ordinary Shares, has been conditionally subscribed for by certain
institutional investors pursuant to the terms and conditions of the US
Subscription Agreement but is not underwritten.



The Offering is conditional, amongst other things, on the passing of the
Resolution to be proposed at the Extraordinary General Meeting to be held on 25
February 2005.



The Company plans to use the proceeds of the Offering, together with its
existing funds, to further develop and exploit the potential of the product
candidates in its pipeline, and resources permitting, to expand its pipeline as
and when opportunities arise. The additional financial strength resulting from
the Offering will also enhance the Company's ability to negotiate more
favourable terms when out-licensing.



The specific areas to which funds will be applied include those listed below:



•      completing the PYM50028 Phase IIa clinical trial in Alzheimer's disease
and progressing development in preparation for a Phase IIb clinical trial, while
seeking an additional licensing partner in new territories;

•       initiating and progressing a PYM50028 Phase IIa clinical trial in
Parkinson's disease, while seeking a licensing partner;

•      initiating and progressing a PYM50018 Phase Ib clinical trial and a Phase
II clinical trial in motor neurone disease; and

•      developing lead candidates in the metabolic disease, asthma and eczema
programs.



Commenting, Dr. Richard Dixey, CEO of Phytopharm, said:



'This is a significant fund raising for Phytopharm and provides the capital
required to further develop the Company's pipeline and to negotiate licenses on
the most favourable terms for shareholders.'



Timetable of principal events


                                                                                                      2005
Record Date for entitlement under the Open Offer                                                31 January
Latest time and date for splitting Application Forms                                       3.00 p.m. on 21
(to satisfy bona fide market claims only)                                                         February
Latest time and date for receipt of Forms of Proxy for the EGM and AGM                     9.00 a.m. on 23
                                                                                                  February
Latest time and date for receipt of Application Forms and                                     3.00 p.m. 23
payment in full under the Open Offer                                                              February
Annual General Meeting                                                                     9.00 a.m. on 25
                                                                                                  February
Extraordinary General Meeting                                                              9.15 a.m. on 25
                                                                                                  February
Admission and commencement of dealings in the New Ordinary Shares                          8.00 a.m. on 28
                                                                                                  February
New Ordinary Shares in uncertificated form expected                                            28 February
to be credited to CREST accounts
Definitive certificates for New Ordinary Shares in certificated form expected to be             By 4 March
despatched





This summary should be read in conjunction with the full text of this
announcement.



For further information:


Phytopharm plc                                                                         [phone]
Dr Richard Dixey, Chief Executive
Dr Wang Chong, Chief Financial Officer

Rothschild                                                                           + 44 (0) 20 7280 5000
Dominic Hollamby

Canaccord                                                                             [phone]
Mark Ashurst
Dr Stephen Rowntree

Media Enquiries: Financial Dynamics                                                   [phone]
David Yates
Ben Atwell



Rothschild, which is regulated by the Financial Services Authority, is acting as
co-Sponsor and financial adviser to Phytopharm plc and no one else in relation
to the Offering and is not advising any other person or treating any other
person as its client in relation thereto, and will not be responsible to any
person other than Phytopharm plc for providing the protections afforded to its
clients nor for providing advice in relation to the Offering nor any other
matter referred to in this document.



Canaccord, which is regulated by the Financial Services Authority, is acting as
co-Sponsor, underwriter and stock broker to Phytopharm plc and no one else in
relation to the Offering and is not advising any other person or treating any
other person as its client in relation thereto, and will not be responsible to
any other person other than Phytopharm plc for providing the protections
afforded to its clients nor for providing advice in relation to the Offering nor
any other matter referred to in this document.



The New Ordinary Shares have not been registered under the US Securities Act,
under the securities laws of any state of the United States or under applicable
securities laws of Canada, Australia, the Republic of Ireland, or Japan.
Accordingly, unless an exemption under any applicable law is available, the New
Ordinary Shares may not be offered, sold, transferred, taken up or delivered,
directly or indirectly, in the United States, Canada, Australia, the Republic of
Ireland or Japan or any other country outside the United Kingdom where such
distribution may otherwise lead to a breach of any law or regulatory
requirement. The Open Offer is not being made, directly or indirectly, in or
into, and will not be capable of acceptance in or from the United States,
Canada, Australia, the Republic of Ireland or Japan and doing so may render
invalid any purported acceptance. Accordingly, neither this announcement, the
Prospectus nor the Acceptance Form are being, and they must not be, issued,
mailed, distributed or otherwise transmitted in, into or from the United States,
Canada, Australia, the Republic of Ireland or Japan unless Phytopharm in its
sole discretion determines otherwise. The parts of this announcement that
describe the US Private Placement are included herein for information purposes
only. The New Ordinary Shares acquired in the US Private Placement will be
subject to restrictions on transfer and, with certain exceptions, may not be
(and are not hereby being) reoffered or resold within the United States.



These written materials are not for distribution in the United States.  These
written materials are not an offer of securities for sale in the United States.
Securities may not be offered or sold in the United States absent registration
under the US Securities Act or an exemption therefrom.  Phytopharm has not and
does not intend to register any of the New Ordinary Shares under the US
Securities Act.  The New Ordinary Shares will not be offered or sold to the
public in the United States.



This announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and business achievements/
performance of Phytopharm and certain of the plans and objectives of management
of Phytopharm with respect thereto. These statements may generally, but not
always, be identified by the use of words such as 'should', 'expects', '
estimates', 'believes' or similar expressions. This announcement also contains
forward-looking statements attributed to certain third parties relating to their
estimates regarding the growth of markets and demand for products. By their
nature, forward-looking statements involve risk and uncertainty because they
reflect Phytopharm's current expectations and assumptions as to future events
and circumstances that may not prove accurate: a number of factors could cause
Phytopharm's actual financial condition, results of operations and business
achievements/performance to differ materially from the estimates made or implied
in such forward-looking statements.




EMBARGOED UNTIL 7.00 a.m.                                                               2 February 2005



Not for release, publication or distribution, directly or indirectly, in or into
     the United States, Canada, Australia, Japan or the Republic of Ireland



                                 Phytopharm plc



    UK Placing, US Private Placement and Open Offer to raise £ 23.9 million



Phytopharm plc (LSE: PYM) ('Phytopharm') announces today that it proposes to
raise approximately £23.9 million (approximately £21.6 million net of expenses)
through a UK Placing, US Private Placement and Open Offer comprising an
aggregate of 13,261,446 New Ordinary Shares at the Issue Price of 180p per New
Ordinary Share. Qualifying Shareholders have the right to subscribe for their
pro rata entitlement in accordance with the terms of the Open Offer. The Issue
Price of 180p per New Ordinary Share represents a discount of 15p (7.7 per
cent.) to the closing middle market price of 195p per Ordinary Share trading on
the London Stock Exchange on 1 February 2005.



This is a significant equity fundraising for the Company and the New Ordinary
Shares to be issued pursuant to the Offering represent an increase of 30.8 per
cent. in the issued share capital of the Company.



Canaccord has agreed to underwrite the UK Placing, comprising an aggregate of
11,178,206 New Ordinary Shares, on the terms and conditions set out in the UK
Placing Agreement. The US Private Placement, comprising an aggregate of
2,083,240 New Ordinary Shares, has been conditionally subscribed for by certain
institutional investors pursuant to the terms and conditions of the US
Subscription Agreement but is not underwritten.



The Offering is conditional, amongst other things, on the passing of the
Resolution to be proposed at the Extraordinary General Meeting to be held on 25
February 2005.



Information on Phytopharm



Phytopharm is a pharmaceutical company engaged principally in the research and
development of pharmaceutical and functional food products based on clinical
data generated from medicinal plant extracts. The Company is currently
conducting research and development on novel pharmaceutical and functional food
products within four disease areas:



•           The neurodegeneration programs focus on Alzheimer's disease,
Parkinson's disease and motor neurone disease, including amyotrophic lateral
sclerosis (Lou Gehrig's disease).

•           The obesity and metabolic disease programs are focused on the
dietary control of obesity and metabolic disease.

•           The dermatology programs are for human eczema and canine skin
allergies.

•           The inflammation programs are directed towards asthma and canine
joint disorders.



Phytopharm has two marketed products, PhytopicaTM and ZanthofenTM, and two
products in development, PYM50028 (CoganeTM) and Hoodia gordonii extract, that
are generating revenues. Phytopharm receives milestone and other payments in
respect of these two products in development, however, both were licensed
relatively recently - CoganeTM in May 2003 and the Hoodia gordonii extract in
December 2004 - hence the revenues received to date have been relatively modest.



The Company was listed on the London Stock Exchange in 1996.



Current Trading and Prospects



The Company published its results for the year ended 31 August 2004 on 26
January 2005, which are reproduced in part 5 of the Prospectus. As at 31 August
2004 Phytopharm had £5,431,160 in cash and as cash held on deposit as short term
investments. Since that date, the Company has continued to incur losses and
utilise cash resources, in line with Directors' expectations, as it continues to
incur expenditures to progress the development of its product candidates and
early stage programs.



On 15 December 2004, Phytopharm announced that it had granted an exclusive
global licence to its Hoodia gordonii extract to Unilever. As part of the
agreement, Unilever has committed to payments totalling approximately £6.5
million out of a potential total of up to £21 million in payments to Phytopharm.
In addition, Phytopharm will receive an undisclosed royalty on sales of all
products containing the extract. Unilever will also manage the agronomy
programme and will support the international patent programme for the products.



The Directors expect that losses and cash outflows will continue for a number of
years. However, the Directors believe that this fundraising will place the
Company in a stronger position to continue the development of the business and
to commercialise its products through licensees, leading to revenue generation
with a view to building a profitable company in the medium term.



Reasons for the Offering and Use of Proceeds



Phytopharm plans to use the proceeds of the Offering, together with its existing
funds, to further develop and exploit the potential of the product candidates in
its pipeline, and resources permitting, to expand its pipeline as and when
opportunities arise. The additional financial strength resulting from the
Offering will also enhance the Company's ability to negotiate more favourable
terms when out-licensing.



The specific areas to which funds will be applied include those listed below,
however, these plans may change over time as a result of regular portfolio
reviews undertaken by the Company:



•            completing the PYM50028 Phase IIa clinical trial in Alzheimer's
disease and progressing development in preparation for a Phase IIb clinical
trial, while seeking a licensing partner;

•           initiating and progressing a PYM50028 Phase IIa clinical trial in
Parkinson's disease, while seeking a licensing partner;

•           initiating and progressing a PYM50018 Phase Ib clinical trial and a
Phase II clinical trial in motor neurone disease; and

•            developing lead candidates in the metabolic disease, asthma and
eczema programs.



The net proceeds of the Offering are expected to be approximately £21.6 million.
The Directors currently estimate that all of the proceeds will be invested in
the development of the programs currently in clinical and preclinical
development, as detailed above.



Details of the UK Placing, US Private Placement and Open Offer



The Company is proposing to raise approximately £23.9 million (approximately
£21.6 million after expenses of the Offering) by the issue of 13,261,446 New
Ordinary Shares at the Issue Price. This issue comprises:



•                2,607,989 New Ordinary Shares, in aggregate, which have been
placed firm under the UK Placing and/or the US Private Placement; and

•                10,653,457 New Ordinary Shares, in aggregate, which have been
placed under the UK Placing and the US Private Placement subject to clawback to
satisfy valid applications by Qualifying Shareholders under the Open Offer.



Invesco Asset Management Limited, the manager of a fund of Amvescap plc, which
as at the date of this document directly or indirectly controls 12,207,244
Existing Ordinary Shares (which represents 28.32 per cent. of the issued share
capital of the Company at the date of this announcement), has undertaken to the
Company, Canaccord and Rothschild that, subject to all the New Ordinary Shares
being issued, it will, under the Open Offer, take up Amvescap plc's pro rata
entitlement to the aggregate number of New Ordinary Shares issued pursuant to
the Offering and to vote in favour of the Resolution and the other resolutions
being proposed at the EGM. Therefore, on the basis of all the New Ordinary
Shares being fully paid and issued pursuant the Offering, Invesco Asset
Management Limited would take up approximately 3,756,075 New Ordinary Shares
under the Open Offer (which represents 28.32 per cent. of the New Ordinary
Shares).



The 2,607,989 New Ordinary Shares which are being placed firm are the subject of
irrevocable undertakings which the Company, Rothschild and Canaccord have
received from certain Qualifying Shareholders not to take up any of their
entitlements under the Open Offer. Accordingly, the Firm Placed Shares are being
placed firm at the Issue Price with institutional and other investors under the
UK Placing and/or the US Private Placement subject to the UK Placing Agreement
and the US Subscription Agreement becoming unconditional.



Under the UK Placing Agreement, Canaccord has agreed, subject to conditions, to
use its reasonable endeavours to procure subscribers for 11,178,206 New Ordinary
Shares at the Issue Price. To the extent that it fails to procure subscribers
for such New Ordinary Shares, and unless those New Ordinary Shares are taken up
by Qualifying Shareholders under the Open Offer, Canaccord will subscribe at the
Issue Price for such New Ordinary Shares.



Under the US Subscription Agreement, certain investors have, subject to
conditions, entered into binding commitments to subscribe for, in aggregate,
2,083,240 New Ordinary Shares at the Issue Price.  The US Private Placement is
not being underwritten.



Qualifying Shareholders will be given the opportunity under the Open Offer to
apply for the Open Offer Shares at the Issue Price pro rata to their holdings of
Existing Ordinary Shares at the close of business on the Record Date on the
following basis:



          4 New Ordinary Shares for every 13 Existing Ordinary Shares



The UK Placing and the Open Offer are conditional, amongst other things, upon
the UK Placing Agreement becoming or being declared unconditional in all
respects by 8.00 a.m. on 28 February 2005 and not having been terminated in
accordance with its terms. The UK Placing Agreement is conditional, amongst
other things, on not having been terminated in accordance with its terms, the
passing of the Resolution and the admission of the UK Placing Shares to the
Official List and to trading on the London Stock Exchange.



The US Subscription Agreement is conditional, amongst other things, on the
conditions in the UK Placing Agreement having been fulfilled and not having been
terminated in accordance with its terms and Admission of the Private Placement
Shares to the Official List and to trading on the London Stock Exchange becoming
effective. The Private Placement Shares to be issued pursuant to the US
Subscription Agreement have not been registered under US securities laws and are
being issued pursuant to an exemption from such registration. Accordingly,
subject to certain conditions, they may not be offered, sold, assigned, pledged,
transferred or otherwise disposed of in the United States or otherwise deposited
into the Company's ADR facility by the purchasers in the US Private Placement.
In addition, from the date of this announcement through the 40th day thereafter
(which is 14 March 2005), The Bank of New York, as depository for the Company's
ADR facility, will not accept deposits of any Ordinary Shares in the facility.



If the above-mentioned conditions are not fulfilled or, if capable of waiver,
waived, on or before the relevant time and date specified in the UK Placing
Agreement and the US Subscription Agreement, the Open Offer will lapse and
application monies under the Open Offer will be refunded to the applicants by
cheque (at the applicant's risk) without interest within 14 days thereafter.



The New Ordinary Shares will, when issued and fully paid, rank pari passu in all
respects with the Existing Ordinary Shares. Application has been made to the
UKLA for the New Ordinary Shares to be admitted to the Official List.
Application has also been made to the London Stock Exchange for the New Ordinary
Shares to be admitted to trading on its market for listed securities. It is
expected that admission to listing of such securities will become effective and
dealings on the London Stock Exchange will commence on 28 February 2005.



Qualifying Shareholders will receive with the Prospectus an Application Form
containing details of their entitlements to subscribe for the Open Offer Shares.
The terms of the Open Offer provide that Qualifying Shareholders may make a
valid application for any number of Open Offer Shares up to and including their
pro rata entitlements as shown on the Application Form.



Qualifying Shareholders should be aware that the Open Offer is not a rights
issue and that entitlements to Open Offer Shares which they do not take up under
the Open Offer will not be sold in the market for their benefit. Instead, the
New Ordinary Shares relating to that entitlement will be placed under the UK
Placing or the US Private Placement.



Recommendation



The Board, which has received advice from Rothschild in relation to the
Offering, considers that the UK Placing, the US Private Placement and the Open
Offer are in the best interests of Shareholders as a whole. In providing advice
to the Board, Rothschild has taken into account the Directors' commercial
assessments of the Offering and the Company's current and future funding
requirements.



Accordingly, the Directors unanimously recommend that Shareholders vote in
favour of the resolutions to be proposed at the Extraordinary General Meeting,
as they intend to do in respect of their own beneficial shareholdings, which
amount to 8,485,130 Ordinary Shares (which represents approximately 19.69 per
cent. of the current issued share capital of Phytopharm and which includes the
7,932,000 Ordinary Shares owned by Chakra Limited, in which Dr Dixey holds 50
per cent. of the issued share capital).



Extraordinary General Meeting



An Extraordinary General Meeting is to be held at 9.15 a.m. on 25 February 2005.
At this meeting, amongst other things, the Resolution will be proposed to
increase the authorised share capital of the Company from £500,000 to £1,000,000
by the creation of 50,000,000 New Ordinary Shares, to authorise the Directors to
allot the New Ordinary Shares and to disapply statutory pre-emption rights in
connection with the Offering.



Timetable of principal events


                                                                                                      2005
Record date for entitlement under the Open Offer                                                31 January
Latest time and date for splitting Application Forms                              3.00 p.m. on 21 February
(to satisfy bona fide market claims only)
Latest time and date for receipt of Forms of Proxy for the EGM and AGM            9.00 a.m. on 23 February
Latest time and date for receipt of Application Forms and                            3.00 p.m. 23 February
payment in full under the Open Offer
Annual General Meeting                                                            9.00 a.m. on 25 February
Extraordinary General Meeting                                                     9.15 a.m. on 25 February
Admission and commencement of dealings in the New Ordinary Shares                 8.00 a.m. on 28 February
New Ordinary Shares in uncertificated form expected                                            28 February
to be credited to CREST accounts
Definitive certificates for New Ordinary Shares in certificated form expected                   By 4 March
to be despatched



Other



Prospectuses are expected to be dispatched to Shareholders today which provide
details of the UK Placing and US Private Placement and Open Offer to explain why
the Board of Phytopharm considers that they are in the best interests of the
Company.



Copies of the Prospectuses can be obtained from or inspected at the offices of
Ashurst at Broadwalk House, 5 Appold Street, London EC2A 2HA.



For further information:


Phytopharm plc                                                                         [phone]
Dr Richard Dixey, Chief Executive
Dr Wang Chong, Chief Financial Officer

Rothschild                                                                           + 44 (0) 20 7280 5000
Dominic Hollamby

Canaccord                                                                             [phone]
Mark Ashurst
Dr Stephen Rowntree

Media Enquiries: Financial Dynamics                                                   [phone]
David Yates
Ben Atwell


Rothschild, which is regulated by the Financial Services Authority, is acting as
co-Sponsor and financial adviser to Phytopharm plc and no one else in relation
to the Offering and is not advising any other person or treating any other
person as its client in relation thereto, and will not be responsible to any
person other than Phytopharm plc for providing the protections afforded to its
clients nor for providing advice in relation to the Offering nor any other
matter referred to in this document.



Canaccord, which is regulated by the Financial Services Authority, is acting as
co-Sponsor, underwriter and stock broker to Phytopharm plc and no one else in
relation to the Offering and is not advising any other person or treating any
other person as its client in relation thereto, and will not be responsible to
any other person other than Phytopharm plc for providing the protections
afforded to its clients nor for providing advice in relation to the Offering nor
any other matter referred to in this document.



The New Ordinary Shares have not been registered under the US Securities Act,
under the securities laws of any state of the United States or under applicable
securities laws of Canada, Australia, the Republic of Ireland, or Japan.
Accordingly, unless an exemption under any applicable law is available, the New
Ordinary Shares may not be offered, sold, transferred, taken up or delivered,
directly or indirectly, in the United States, Canada, Australia, the Republic of
Ireland or Japan or any other country outside the United Kingdom where such
distribution may otherwise lead to a breach of any law or regulatory
requirement. The Open Offer is not being made, directly or indirectly, in or
into, and will not be capable of acceptance in or from the United States,
Canada, Australia, the Republic of Ireland or Japan and doing so may render
invalid any purported acceptance. Accordingly, neither this announcement, the
Prospectus nor the Acceptance Form are being, and they must not be, issued,
mailed, distributed or otherwise transmitted in, into or from the United States,
Canada, Australia, the Republic of Ireland or Japan unless Phytopharm in its
sole discretion determines otherwise. The parts of this announcement that
describe the US Private Placement are included herein for information purposes
only. The New Ordinary Shares acquired in the US Private Placement will be
subject to restrictions on transfer and, with certain exceptions, may not be
(and are not hereby being) reoffered or resold within the United States.



These written materials are not for distribution in the United States.  These
written materials are not an offer of securities for sale in the United States.
Securities may not be offered or sold in the United States absent registration
under the US Securities Act or an exemption therefrom.  Phytopharm has not and
does not intend to register any of the New Ordinary Shares under the US
Securities Act.  The New Ordinary Shares will not be offered or sold to the
public in the United States.



This announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and business achievements/
performance of Phytopharm and certain of the plans and objectives of management
of Phytopharm with respect thereto. These statements may generally, but not
always, be identified by the use of words such as 'should', 'expects', '
estimates', 'believes' or similar expressions. This announcement   also contains
forward-looking statements attributed to certain third parties relating to their
estimates regarding the growth of markets and demand for products. By their
nature, forward-looking statements involve risk and uncertainty because they
reflect Phytopharm's current expectations and assumptions as to future events
and circumstances that may not prove accurate: a number of factors could cause
Phytopharm's actual financial condition, results of operations and business
achievements/performance to differ materially from the estimates made or implied
in such forward-looking statements.



Definitions



The following definitions are used throughout this announcement except where the
context requires otherwise:


'Act' or the 'Companies Act'       the Companies Act 1985, as amended
'Admission'                        admission of the New Ordinary Shares to the Official List becoming
                                   effective in accordance with the Listing Rules and to trading on the
                                   market for listed securities of the London Stock Exchange
'AGM'                              the Annual General Meeting of the Company to be held on 25 February
                                   2005
'Application Form'                 the application form accompanying the Prospectus on which Qualifying
                                   Shareholders may apply for New Ordinary Shares under the Open Offer
'Board' or 'Directors'             the board of directors of Phytopharm
'Canaccord'                        Canaccord Capital (Europe) Limited
'certificated form'                an Ordinary Share which is not in uncertificated form
'CREST'                            the relevant system (as defined in the Regulations) in respect of
                                   which CRESTCo Limited is the Operator (as defined in such Regulations)
                                   in accordance with which listed securities may be held and transferred
                                   in uncertificated form
'Existing Ordinary Shares'         all of the existing issued Ordinary Shares in the capital of the
                                   Company at the date of this document
'Extraordinary General Meeting' or the Extraordinary General Meeting of the Company, convened for 9.15
'EGM'                              a.m. on 25 February or as soon thereafter as the AGM convened for 9.00
                                   a.m. on the same date is concluded (or any adjournment of such
                                   Extraordinary General Meeting)
'Firm Placed Shares'               the 2,607,989 New Ordinary Shares in respect of which certain
                                   Qualifying Shareholders have given undertakings not to take up any of
                                   their entitlements pursuant to the Open Offer and which are being
                                   placed firm
'Issue Price'                      the price of 180p per New Ordinary Share payable under the UK Placing,
                                   the US Private Placement and the Open Offer
'London Stock Exchange' orLSE'     the London Stock Exchange plc
'New Ordinary Shares'              the 13,261,446 new Ordinary Shares proposed to be issued pursuant to
                                   the UK Placing, the US Private Placement and the Open Offer
'Offering'                         collectively the UK Placing, the US Private Placement and the Open
                                   Offer
'Official List'                    the Official List of the UK Listing Authority made under Section 74 of
                                   the Financial Services and Markets Act 2000
'Open Offer'                       the conditional offer by Canaccord, on behalf of the Company, to
                                   Qualifying Shareholders to subscribe for the Open Offer Shares at the
                                   Issue Price on the terms and subject to the conditions set out or
                                   referred to in this document and the Application Form
'Open Offer Shares'                the 13,261,446 New Ordinary Shares to be issued for cash pursuant to
                                   the Open Offer
'Ordinary Shares'                  ordinary shares of 1 penny each in the capital of Phytopharm
'Phytopharm' or the 'Company' or   Phytopharm plc, together where appropriate, with its subsidiary
the 'Group'                        undertakings (as defined in section 258 of the Act)


'Private Placement Shares'         2,083,240 New Ordinary Shares to be issued for cash pursuant to the US
                                   Private Placement
'Prospectus'                       the Prospectus relating to the Offering which is being posted today to
                                   Shareholders and participants in the Phytopharm share option schemes
'Qualifying Shareholders'          holders of Ordinary Shares on the register of members of the Company
                                   as at the close of business on the Record Date
'Record Date'                      the record date for the Open Offer, being 31 January 2005
'Regulations'                      the Uncertificated Securities Regulations 2001 (SI 1002 No. 3755)
'Resolution'                       Resolution 1 set out in the notice of EGM
'Rothschild'                       N M Rothschild & Sons Limited
'Shareholders'                     holders of Ordinary Shares
'UK Placing'                       the conditional placing of 11,178,206 New Ordinary Shares at the Issue
                                   Price by Canaccord pursuant to the UK Placing Agreement
'UK Placing Agreement'             the conditional co-sponsors' Placing and Open Offer Agreement dated 2
                                   February 2005 between the Company, Canaccord and Rothschild relating,
                                   amongst other things, to the UK Placing and the Open Offer
'UK Placing Shares'                11,178,206 New Ordinary Shares the subject of the UK Placing
'UKLA' or  'UK Listing Authority'  the Financial Services Authority acting in its capacity as the
                                   competent authority for listing in the United Kingdom under Part IV of
                                   the Financial Services and Markets Act 2000
'US Private Placement'             the conditional private placement in the US of 2,083,240 New Ordinary
                                   Shares at the Issue Price pursuant to the US Subscription Agreement as
                                   described in this document
'US Subscription Agreement'        the subscription agreement dated 2 February 2005 pursuant to which
                                   certain institutional investors in the US Private Placement have,
                                   subject to certain conditions, entered into binding commitments with
                                   the Company to subscribe for Private Placement Shares at the Issue
                                   Price




                      This information is provided by RNS
            The company news service from the London Stock Exchange