Re Agreement

Phytopharm PLC
28 February 2005

Embargoed until 7.00 a.m. on 28 February



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 ('Phytopharm' or the 'Company')



On 2 February 2005, Phytopharm announced a proposed fund raising, which was
subsequently approved by shareholders on 25 February 2005 at an Extraordinary
General Meeting.



The Company announces that following the Extraordinary General Meeting, it has
been informed by Yamanouchi Pharmaceutical Co. Ltd ('Yamanouchi') that as a
result of a portfolio review arising out of the merger of Yamanouchi with
Fujisawa Pharmaceutical Co, it is likely that Yamanouchi will 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 decision has not yet been finally ratified
and Phytopharm has not yet received formal notice of termination.



Yamanouchi has 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 stated that it
will make a milestone payment of £4.0 million to Phytopharm.



In the light of this change to the Company's position, the Board of Phytopharm
and its Sponsors, Stock Brokers and Underwriter have mutually agreed to
terminate the proposed fund raising. The Board notes that Yamanouchi has stated
that it will make a milestone payment of £4.0 million to Phytopharm and the
Board is considering its position with regard to any future fund raising.



Enquiries:


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

Canaccord Capital (Europe) Ltd                       Tel: [phone]
Mark Ashurst/Dr Stephen Rowntree

Financial Dynamics                                   Tel: [phone]
David Yates/Ben Atwell





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.




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