Placing and Open Offer

Phytopharm PLC
08 April 2005


                                                                8 April 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


                 Placing and Open Offer to raise £ 10.1 million


Phytopharm plc (LSE: PYM) ('Phytopharm') announces today that it proposes to
raise approximately £10.1 million (approximately £9.0 million net of expenses)
through a Placing and Open Offer comprising an aggregate of 8,081,193  New
Ordinary Shares at the Issue Price of 125p 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 125p per New
Ordinary Share represents a discount of 6.5p (4.9 per cent.) to the closing
middle market price of 131.5p per Ordinary Share trading on the London Stock
Exchange on 7 April 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 18.75 per
cent. in the issued share capital of the Company.



Canaccord Capital (Europe) Limited ('Canaccord') has agreed to underwrite the
Placing, comprising an aggregate of 8,081,193 New Ordinary Shares, on the terms
and conditions set out in the Placing Agreement.



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 4
May 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 Placing is being underwritten by Canaccord, on the terms and conditions set
out in the Placing Agreement. The net proceeds of the Offering, at approximately
£9.0 million, will be applied to those areas 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 preparing the licensing package for a global licensing partner;

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

•   progressing preclinical development in the metabolic disease, asthma
    and eczema programs.



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



''Phytopharm continues to enjoy strong support from investors.  The company has
an impressive portfolio of innovative products in both neurodegeneration and
obesity and with the proceeds of the fundraising announced today looks forward
to further developing its promising products.'



Timetable of principal events
                                                                                                 2005
Record Date for entitlement under the Open Offer                                              1 April
Latest time and date for splitting Application Forms (to satisfy bona fide      3.00 p.m. on 28 April
market claims only)
Latest time and date for receipt of Forms of Proxy for the EGM                        9 a.m. on 3 May
Latest time and date for receipt of Application Forms and payment in full             3.00 p.m. 3 May
under the Open Offer
Extraordinary General Meeting                                                        10 a.m. on 4 May
Admission and commencement of dealings in the New Ordinary Shares                  8.00 a.m. on 5 May
New Ordinary Shares in uncertificated form expected to be credited to                           5 May
CREST accounts
Definitive certificates for New Ordinary Shares in certificated form                        By 12 May
expected to be 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 Williams
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.



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.


                                                                   8 April 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



                 Placing and Open Offer to raise £ 10.1 million



Phytopharm plc (LSE: PYM) ('Phytopharm') announces today that it proposes to
raise approximately £10.1 million (approximately £9.0 million net of expenses)
through a Placing and Open Offer comprising an aggregate of 8,081,193  New
Ordinary Shares at the Issue Price of 125p 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 125p per New
Ordinary Share represents a discount of 6.5p (4.9 per cent.) to the closing
middle market price of 131.5p per Ordinary Share trading on the London Stock
Exchange on 7 April 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 18.75 per
cent. in the issued share capital of the Company.



Canaccord Capital (Europe) Limited ('Canaccord') has agreed to underwrite the
Placing, comprising an aggregate of 8,081,193 New Ordinary Shares, on the terms
and conditions set out in the Placing Agreement.



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 4
May 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
have generated revenues through milestone and other payments. Hoodia gordonii
extract was licensed in December 2004 to Unilever who committed to payments
totalling approximately £6.5 million out of a potential of up to £21 million in
payments to Phytopharm. The Company has received revenues of £7 million
(approximately £6.3 million net of Japanese withholding tax) to date in respect
of PYM50028 including the recent £4.0 million (approximately £3.6 million net of
Japanese withholding tax) milestone payment from Yamanouchi; however, the
licensing agreement has now been terminated and any future revenue from PYM50028
would be contingent on the Company entering into a licensing agreement with
another third party. Subject to the results of the ongoing Phase II 'proof of
principle' study of PYM50028, which is on target to report preliminary results
in the fourth quarter of 2005, the Company intends to seek global multinational
partners in the first half of 2006.



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



Proposed fundraising of 2 February 2005



On 2 February 2005, Phytopharm announced a proposed fundraising of approximately
£23.9 million, which was subsequently approved by shareholders on 25 February
2005 at an extraordinary general meeting.



Following the extraordinary general meeting, the Company was informed by
Yamanouchi that, as a result of a portfolio review arising out of the merger of
Yamanouchi with Fujisawa Pharmaceutical Co., it was likely that Yamanouchi would
terminate the licensing agreement, covering Japan and some other Asian
countries, in connection with PYM50028 (CoganeTM), Phytopharm's candidate
product for the treatment of Alzheimer's disease. The Company subsequently
received confirmation on 28 March 2005 of Yamanouchi's intention to terminate
the licensing agreement. The Company accepted this decision and the termination
took place with immediate effect.



Yamanouchi acknowledged that safety data in relation to 60 patients treated with
PYM50028 has fulfilled the criteria set out in the licensing agreement between
Phytopharm and Yamanouchi. Furthermore, Yamanouchi has made a milestone payment
of £4.0 million to Phytopharm (approximately £3.6 million net of Japanese
withholding tax).



In the light of the change to the Company's position arising from Yamanouchi's
notification following the extraordinary general meeting of 25 February 2005,
the Board of Phytopharm and its Sponsors, Stock Brokers and Underwriter mutually
agreed to terminate the proposed fundraising subject to payment of costs and
expenses. The Directors have subsequently reviewed the Company's financial
position and have determined that a fundraising remains in the best interests of
the Company.



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 expenditure 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 totaling 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.



On 28 February 2005, the Company announced that it had been informed by
Yamanouchi that, as a result of a portfolio review arising out of the merger of
Yamanouchi with Fujisawa Pharmaceutical Co., it was likely that Yamanouchi would
terminate the licencing agreement, covering Japan and some other Asian
countries, in connection with PYM50028 (CoganeTM), Phytopharm's candidate
product for the treatment of Alzheimer's disease. The Company subsequently
received confirmation on 28 March 2005 of Yamanouchi's intention to terminate
the licensing agreement. The Company accepted this decision and the termination
took place with immediate effect.



Yamanouchi acknowledged that safety data in relation to 60 patients treated with
PYM50028 has fulfilled the criteria set out in the licensing agreement between
Phytopharm and Yamanouchi. Furthermore, Yamanouchi has made a milestone payment
of £4.0 million to Phytopharm (approximately £3.6 million net of Japanese
withholding tax).



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 Placing is being underwritten by Canaccord on the terms and conditions set
out in the Placing Agreement. The net proceeds of the Offering, at approximately
£9.0 million, will be applied to those areas 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 preparing the licensing package for a global licensing partner;

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

•  progressing preclinical development in the metabolic disease, asthma
   and eczema programs.



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 Placing and Open Offer



The Company is proposing to raise approximately £10.1 million (approximately
£9.0 million after expenses of the Offering) by the issue of 8,081,193 New
Ordinary Shares at the Issue Price. This issue comprises:



•  1,589,243 Ordinary Shares, in aggregate, which have been placed firm
   under the Placing;

•  4,203,092 Ordinary Shares, in aggregate, which have been placed
   under the Placing subject to clawback to satisfy valid applications by
   Qualifying Shareholders under the Open Offer; and

•  2,288,858 Ordinary Shares which, as described below, Invesco Asset
   Management Limited have undertaken to take up pursuant to the Open Offer.



Invesco Asset Management Limited, the manager of certain funds 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 document), has undertaken to the
Company, Canaccord and Rothschild that it will, under the Open Offer, take up
Invesco Asset Management Limited's pro rata entitlement to the aggregate number
of New Ordinary Shares issued pursuant to the Offering and vote in favour of the
Resolution and the other resolutions being proposed at the EGM. Therefore,
Invesco Asset Management Limited would take up approximately 2,288,858 New
Ordinary Shares under the Open Offer (which represents 28.32 per cent. of the
New Ordinary Shares).



The 1,589,243 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, such shares are being placed
firm at the Issue Price with institutional and other investors under the Placing
subject to the Placing Agreement becoming unconditional.



Under the Placing Agreement, Canaccord has agreed, subject to conditions, to use
its reasonable endeavours to procure subscribers for 8,081,193 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.



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:



          3 New Ordinary Shares for every 16 Existing Ordinary Shares



Fractions of New Ordinary Shares will not be allocated to Qualifying
Shareholders in the Open Offer and entitlements to apply for New Ordinary Shares
will be rounded down to the nearest whole number of New Ordinary Shares.
Accordingly, Qualifying Shareholders with less than 6 Existing Ordinary Shares
will not be entitled to apply for any New Ordinary Shares. New Ordinary Shares
representing the aggregate of fractional entitlements will be taken up under the
Placing for the benefit of the Company. The Open Offer is only underwritten by
Canaccord.



The Placing and Open Offer are conditional, amongst other things, upon the
Placing Agreement becoming or being declared unconditional in all respects by
8.00 a.m. on 5 May 2005 (or such later time and/or date as Canaccord may agree)
and not having been terminated in accordance with its terms. The 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 Placing Shares to the Official List and to trading on the London Stock
Exchange becoming effective.



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 Placing
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 5 May 2005.



Qualifying Shareholders will receive with this document an Application Form
containing details of their entitlements to subscribe for 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
Placing.



Recommendation



The Board, which has received advice from Rothschild in relation to the
Offering, considers that the Placing and Open Offer together with all other
resolutions 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 10 a.m. on 4 May 2005. At this
meeting, amongst other things, the Resolution will be proposed to authorise the
Directors to allot the New Ordinary Shares and to disapply statutory pre-emption
rights in connection with the Offering.



In addition to the Resolution, the following resolutions will be proposed at the
EGM in order to grant to the Directors the authority to generally allot Ordinary
Shares (other than pursuant to the Offering) taking into account the issued
share capital of the Company as enlarged by the Offering:



• Resolution 2, which is conditional on the passing of the Resolution and
Admission, will be proposed as an ordinary resolution to authorise the Directors
to allot relevant securities up to a maximum aggregate nominal amount of
£168,897 (representing approximately 33 per cent. of the issued share capital of
the Company as enlarged by the Offering). The authority conferred by resolution
2 will expire at the conclusion of the annual general meeting of the Company in
2006 and will be in substitution for the general authority conferred at the AGM;
and



• Resolution 3, which is conditional on the passing of resolution 2, will be
proposed as a special resolution to empower the Directors to allot Ordinary
Shares and sell treasury shares for cash as if section 89 of the Companies Act
did not apply to any such allotment and/or sale provided that such power is
limited to certain pre-emptive offers and otherwise to a maximum aggregate
nominal amount of £25,591 (representing approximately five per cent. of the
issued share capital of the Company as enlarged by the Offering). The authority
conferred by resolution 3 will expire at the conclusion of the annual general
meeting of the Company in 2006



Timetable of principal events


                                                                                                 2005
Record Date for entitlement under the Open Offer                                              1 April
Latest time and date for splitting Application Forms (to satisfy bona fide      3.00 p.m. on 28 April
market claims only)
Latest time and date for receipt of Forms of Proxy for the EGM                        9 a.m. on 3 May
Latest time and date for receipt of Application Forms and payment in full             3.00 p.m. 3 May
under the Open Offer
Extraordinary General Meeting                                                        10 a.m. on 4 May
Admission and commencement of dealings in the New Ordinary Shares                  8.00 a.m. on 5 May
New Ordinary Shares in uncertificated form expected to be credited to CREST                     5 May
accounts
Definitive certificates for New Ordinary Shares in certificated form                        By 12 May
expected to be despatched



Other



Prospectuses are expected to be dispatched to Shareholders today which provide
details of the Placing 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 Williams
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.



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 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 10 a.m.
'EGM'                              on 4 May 2005
'Issue Price'                      the price of 125p per New Ordinary Share payable under the Placing and
                                   the Open Offer
'London Stock Exchange' or LSE'    the London Stock Exchange plc
'New Ordinary Shares'              the 8,081,193 new Ordinary Shares proposed to be issued pursuant to
                                   the Placing and the Open Offer
'Offering'                         collectively the Placing 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 8,081,193 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)


'Placing'                          the conditional placing of 8,081,193 New Ordinary Shares at the Issue
                                   Price by Canaccord pursuant to the Placing Agreement as described in
                                   this document
'Placing Shares'                   8,081,193 New Ordinary Shares the subject of the Placing
'Placing Agreement'                the conditional co-sponsors, placing and open offer agreement dated 7
                                   April 2005 between the Company, Canaccord and Rothschild relating,
                                   amongst other things, to the Placing and the Open Offer as described
                                   in paragraph 9.1 of part 6 of the Prospectus
'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 1 April 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
'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




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