Final Results

RNS Number : 0348J

Phytopharm PLC

27 November 2008

 



 27 November 2008

Phytopharm plc

Preliminary Results for the period ended 30 September 2008

Phytopharm plc (PYM: London Stock Exchange) ('Phytopharm' or the 'Company') announces today its preliminary results for the year ended 30 September 2008. Comparative figures are for the thirteen month period ended 30 September 2007.  

The recent departure of the CEO and CFO and the ongoing discussions with Unilever to terminate the agreements for the development and commercialisation of Hoodia extract have been very challenging for this small Company.

The Board are presently assessing the strategic options of the Company with a view to enhancing shareholder value as well as preserving valuable cash resources.

This urgent review will include an assessment of the Company's operating structure to ensure that it is functioning in the most cost effective manner and with an appropriate executive team in place. We intend to update shareholders with the results of our review as soon as is practicable. 

The Company remains stable with a healthy cash balance. In order to maintain our priority programmes, it is our intention to achieve substantial cost savings while continuing to pursue sources of non-dilutive revenue as we move forward into 2009. 

Once the agreements with Unilever have been formally terminated, the Board will re-assess opportunities for Hoodia extract, utilising the considerable body of pre-clinical and clinical data that has been developed over the past four years. This will allow the Board to explore alternative product formats and seek suitable partners to further develop or acquire this valuable product line.

The Board also intends to conduct a Phase IIa one month clinical study on Cogane™ to investigate the safety, tolerability and pharmacokinetic profile in Parkinson's disease patients. Following the completion of this study, the Company would look to jointly develop or outlicense Cogane™ with a pharmaceutical company. In the case of Myogane™, the Company intends to conduct a similar Phase IIa study in patients with motor neurone disease (ALS), but only if sufficient funds are available from non-dilutive sources to fund this trial. The Company would look for a pharmaceutical company to acquire or outlicense this product subsequent to the completion of the trial. 

We thank our employees for their loyalty and cooperation during this difficult time. 

Mr Alistair Taylor, Chairman commented: 'Over the past four years we have generated a considerable body of pre-clinical and clinical data on Hoodia with Unilever. Whilst Hoodia has not been found to be suited for a Unilever branded food and beverage product, we have compiled a substantial dataset which will allow us to explore alternative product formats for the commercialisation of Hoodia. Once a satisfactory termination agreement has been agreed with Unilever, we expect to take further steps to build on this foundation and seek other partners to further develop Hoodia and bring this exciting opportunity to market.  Our pharmaceutical products Cogane™ and Myogane™, after a delay due to additional work on formulation, continue to make solid progress towards our goal of outlicensing or partnering the development of these products.'

Enquiries Phytopharm plc Alistair Taylor, Chairman Sandy Morrison, Acting CEO [phone]

U.K.  Investor Relations FD David Yates John Dineen [phone]

For further information about Phytopharm please see our website at http://www.phytopharm.com

Key events

Hoodia extract

• Discussions underway with Unilever to terminate the agreements for the development and commercialisation of Hoodia extract originally signed in December 2004.

Cogane™

• Successful grant of up to $1.16 million non-dilutive funding from The Michael J. Fox Foundation in January 2008 to support the development of Cogane™ for Parkinson's disease. 

• Progress on Cogane™ development for Phase IIa clinical study has been maintained.

• Submission for ethics approval for the Phase IIa clinical study is planned for Q1 2009.

Myogane™

• European Union Orphan Medicinal Product Designation for ALS granted in May 2008.

• Progress on Myogane™ development work has been maintained at a slower pace as priority has been given to Cogane™.

Phytopica®

• Due in part to the cool and wet summer product sales were slower than expected at £0.17 million for 12 months to 30 September 2008 (13 months 2007: £0.37 million).

• Hong Kong launch of Phytopica by Intervet/Schering-Plough Animal Health in June 2008.

Key Financials

Cash resources

• £8.56 million (£7.37 million net) raised in March 2008 through a Placing and Open Offer.
• There has been no material change in the financial position of the Company since 30 September 2008.
• Remaining cash balance at 30 September 2008 of £7.11 million (FY07: £2.24 million). A cost saving programme will be implemented and non-dilutive funding will be aggressively pursued.

Results for the year

• Revenue of £2.62 million (13 months 2007: £3.12 million).
• Loss after tax of £2.28 million (13 months 2007: £5.81 million).

Post year end

Board changes

• On 13 November CEO Dr Daryl Rees and CFO Mr Piers Morgan resigned as Directors and Mr Sandy Morrison appointed as acting CEO.

Business Review

Phytopharm is a pharmaceutical development and functional food company.  Our products are developed from medicinal plants, thereby reducing the development risk, cost and time to market.  As a virtual company, Phytopharm's model is centred on a lean cash burn with all laboratory, manufacturing and clinical work out-sourced to specialists, while core competencies such as strategy and management are maintained in-house.  Close collaboration with charitable organisations enhances our interaction with worldwide specialists and accelerates our development programmes increasing their value.

Hoodia extract is a weight management functional food product based on an extract of the succulent plant, Hoodia, which contains a novel satiety stimulator that reduces calorie intake in overweight subjects, as demonstrated in a double-blind, placebo-controlled clinical study. Extracts of Hoodia and the active molecules therein are the subject of a global patenting programme, with major patents granted in the US, UK, Europe and Japan and pending in all other major territories.

Unilever and Phytopharm originally signed a licence and joint development agreement for the development and commercialisation of Hoodia extract in December 2004.

After a recent clinical study using Hoodia extract in a drink-based product Unilever has concluded that Hoodia extract is unsuitable to be taken forward by them in a mass market food and beverage product. As a consequence, the parties are discussing the terms of termination. Phytopharm believes, however, that the considerable body of pre-clinical and clinical data of Hoodia extract obtained over the past four years encourage its further study in alternative product formats for obesity, as well as for pharmaceutical and veterinary applications, probably in conjunction with a future licence partner. 

Parkinson's and Alzheimer's disease and neuropsychiatric disorders

Cogane™ is in clinical development as a treatment for Parkinson's disease.  In pre-clinical models, Cogane™ reverses the changes in the area of the brain involved in Parkinson's disease by inducing the body's own production of proteins known as neurotrophic factors.  

In January 2008, The Michael J.  Fox Foundation for Parkinson's Research (MJFF) granted funding of up to $1.16 million over two years to support the development of Cogane™ as a treatment for Parkinson's disease.  The MJFF funding is supporting pre-clinical studies to determine the optimal dosing requirements for Cogane™ which are being carried out by Dr Jonathan Brotchie, a senior scientist at the Toronto Western Hospital and part of the University Health Network (UHN) in Toronto, Canada.  Dr Brotchie is a recognised world expert in the field of Parkinson's disease and, at UHN, runs one of the world's premier research laboratories for the identification of novel treatments, diagnostics and cures for Parkinson's disease and related disorders. Further charitable grants are under discussion and will be pursued as the development programme progresses during the coming year.  

It is the Company's intention to commence a Phase IIa one month clinical study early in 2009, to investigate the safety, tolerability and pharmacokinetic profile in Parkinson's patients. Subsequent to the successful completion of this trial, the Company would look to outlicense the product or jointly develop Cogane™ through a Phase IIb clinical study examining the safety, tolerability, pharmacokinetic profile and efficacy in Parkinson's patients. 

The neuroprotective and neurotrophic actions of Cogane™ suggest potential beneficial effects in other neurodegenerative diseases including Alzheimer's disease.  

Myogane™ is in clinical development as a treatment for ALS (also known as Lou Gehrig's disease).  ALS is the most prevalent motor neurone disease and results from progressive degeneration of motor neurones which lead to severe muscle weakness and wasting followed by paralysis.  Myogane™ induces the body's own production of proteins known as neurotrophic factors.  

In May 2008 the European Agency for the Evaluation of Medicinal Products ('EMEA') awarded Orphan Medicinal Product Designation for Myogane™, as a treatment for ALS.  The Orphan Medicinal Product Designation provides Phytopharm with market exclusivity in the European Union for 10 years following Myogane's™ market authorisation.  The EMEA grants the Orphan Medicinal Product Designation for products that diagnose, prevent or treat life-threatening or very serious conditions affecting no more than five out of every 10,000 people in the European Union.  

The Company intends to carry out a Phase IIa repeat dose one month clinical study on Myogane™ with concomitant administration of Riluzole (the only agent presently indicated for the treatment of ALS). This clinical study would only be carried out provided that adequate funding was available from non-dilutive sources. Several charititable grants are under discussion at the present time. The Company would look for a pharmaceutical company to acquire, jointly develop or license Myogane™ in the coming year. 

Myogane™ has previously been granted Orphan Drug status and Fast Track Designation for the treatment of ALS by the United States Food and Drug Administration (FDA).

The neuroprotective and neurotrophic actions of Myogane™ suggest potential beneficial effects in other orphan neurodegenerative diseases including Huntington's disease, Friedrich's ataxia, progressive supranuclear palsy and multiple system atrophy.  

Phytopica® is a natural, three plant product for canine skin health that provides a novel 3 in 1 approach to help maintain a normal healthy immune system, support normal white cell function and provide anti-oxidant benefits.  The beneficial effects and excellent safety profile of Phytopica® have been proven extensively in clinical trials and the product has been found to be suitable for all dogs, whatever size or breed. 

Sales of Phytopica® for the year ended 30 September 2008 were lower than expected due, in part, to the cool and wet summer. Phytopica® is being sold in four countries following the Hong Kong launch in June 2008 and Intervet/Schering-Plough Animal Health are expected to seek to market and distribute Phytopica® in further countries.

Pre-clinical product development

Progress has been achieved on our low expenditure pre-clinical programmes, including our functional food candidate for memory and concentration licensed from the Institute of Radiation Medicine, the Academy of Military Medical Sciences, Beijing in 2007.

Board changes

On 13 November 2008 Phytopharm announced that it had received notice of termination of employment contract from Dr Daryl Rees, Chief Executive Officer and Mr Piers Morgan, Chief Financial Officer. 

On 14 November 2008, the Group announced that until a new executive team has been appointed, Mr Alexander Morrison, a Non-Executive Director of the Company and the former Chief Executive of Lipton Limited, has taken over the role of acting CEO. He is being supported in the financial role by Phytopharm's Head of Finance.

Financial information

The financial performance for the year ended 30 September 2008 reflects the Group's ongoing pharmaceutical development and functional food activities.

Period end

The results for the financial year ended 30 September 2008 comprise 12 months of trading.  However, during the previous financial period the Group changed its financial year end from 31 August to 30 September 2007 and accordingly the comparative period comprises trading for the thirteen months ended 30 September 2007.  

Cash flow

The net cash used in operating activities for the year ended 30 September 2008 was £2.58 million, a reduction from £5.46 million in the thirteen month period ended 30 September 2007. Our goal is to increase shareholder value by progressing our products through development, subject to available resources. Taking into account the planned Phase IIa study for Cogane™, Phytopharm expects its net cash outflow, funded from available resources, to increase in 2009. Further pharmaceutical programmes will be stepped up as and when additional external funding is obtained through charitable organisations, grants and other non-dilutive funding as far as possible. See note 1 to the attached financial information in this regard.

Income statement 

The revenue of £2.62 million for the year (13 months 2007: £3.12 million) was generated from our two collaboration agreements: firstly with Unilever for the development of Hoodia extract as a weight management functional food product; and secondly with Intervet/Schering-Plough Animal Health for global sales, marketing and distribution of Phytopica® for canine skin health.

Revenue from Unilever represents reimbursement to the Group of development expenditure relating to the Hoodia extract programme, together with funding of certain Phytopharm staff, and therefore the level of revenue in each period depends on the nature of the ongoing activities and level of related expenditure at that particular time.  Of the revenue in the 12 months to 30 September 2008, £2.33 million represents payments from Unilever (13 months 2007: £2.64 million).

Revenue from Intervet/Schering-Plough Animal Health comprises the sale of Phytopica® by Phytopharm to Intervet/Schering-Plough Animal Health for onward distribution and eventual sale to end users.  Phytopica® sales in the 12 months to 30 September 2008 amounted to £0.17 million (13 months 2007: £0.37 million).

Other miscellaneous revenue for the year ended 30 September 2008 amounted to £0.12 million (13 months 2007: £0.12 million).

Other income of £0.34 million (13 months 2007: £nil) represents payments and amounts payable from Michael J Fox Foundation in respect of pre-clinical development work on Cogane™.

A total of £4.25 million was spent on development during the year ended 30 September 2008, compared to £7.50 million for the thirteen months ended 30 September 2007.  Approximately £1.84 million of the development expenditure related to costs reimbursed by Unilever for the Hoodia extract programme for weight management (13 months 2007: £2.11 million).  Since the year end, the Group has announced that it is in discussion with Unilever with a view to terminate the agreements for the development and commercialization of Hoodia extract.  The Group intends to explore alternative product formats for the commercialization of Hoodia extract and will take further steps to seek other partners to develop Hoodia extract.  Following the successful completion of the Company's Placing and Open Offer in March 2008 the Group has been preparing to conduct further clinical studies on its pharmaceutical programme Cogane™, especially a Phase IIa clinical trial in 2009. Expenditure in 2009 on a Myogane™ Phase IIa clinical study will only be initiated when adequate additional funding has been secured.

Expenditure on selling, general and administrative expenses for the twelve months ended 30 September 2008 reduced to £1.29 million from £1.92 million for the thirteen months ended 30 September 2007.

Interest receivable for the year to 30 September 2008 amounted to £0.27 million, compared to £0.22 million for the thirteen months ended 30 September 2007.  The increase reflects the higher average cash balance in the second half of 2008, following the Company's successful Placing and Open Offer.

The reduced overall loss on ordinary activities before taxation for the twelve month period to 30 September 2008 was £2.48 million, a significant reduction compared to £6.33 million for the thirteen month period to 30 September 2007.  The loss after tax for the twelve month period ended was also reduced by more than 50 per cent. to £2.28 million from £5.81 million for the thirteen month period to 30 September 2007.  This reduction is mainly due to the lower level of expenditure on development during the period together with a credit for share option compensation of £0.74 million compared to a charge for the thirteen months to 30 September 2007 of £0.56 million.  

Balance sheet

At 30 September 2008 non-current assets amounted to £0.30 million (2007: £0.20 million). Intangible assets of £0.10 million at 30 September 2008 represent patent and know-how licences acquired externally that have been recognised as an asset at cost (30 September 2007: £nil).

Current assets amounted to £8.19 million at 30 September 2008 (30 September 2007: £3.95 million).  Current assets comprised inventories of £0.40 million (30 September 2007: £0.68 million), amounts receivable of £0.68 million, of which £0.20 million related to R & D tax credits (30 September 2007: £1.03 million, of which £0.52 million related to R & D tax credits), and cash resources (comprising money market investments and cash and cash equivalents) of £7.11 million (30 September 2007: £2.24 million).

Inventories fell in the twelve months to 30 September 2008 as the Group utilised stocks for the manufacture and sale of Phytopica®. Inventories at 30 September 2008 were £0.40 million after an amount of £0.16 million was provided against the value of this inventory.  Finished goods represent Phytopica® manufactured to fulfil orders received from Intervet/Schering-Plough Animal Health during the period.

Amounts receivable excluding R & D tax credits at £0.48 million at 30 September 2008 are in line with previous levels of £0.51 million at 30 September 2007.  The level of R & D tax credit receivable by the Group, at £0.20 million, is lower than the previous period of £0.52 million at 30 September 2007, reflecting the combination of lower expenditure on development during the year and the fact that during the period a higher proportion of the Group's development activities have been related to the Hoodia extract programme which, because it is fully reimbursed by Unilever, does not qualify for R & D tax credits.

Cash resources described as cash and cash equivalents are invested for period of 90 days or less.  Money market investments represent fixed-rate short-term deposits placed with a range of banks at fixed terms with a maturity date of more than three months. The Group's policy is to minimise the risks associated with cash and short term investments by placing these deposits with institutions with a recognised high rating, or with one of the major clearing banks. Together, cash, cash equivalents and money market investments increased during the year to 30 September 2008 to £7.11 million from £2.24 million at 30 September 2007; this reflects the inflow of cash from the Placing and Open Offer, less cash outflows on operating activities.

Current liabilities at 30 September 2008 of £1.33 million are in line with the £1.35 million at 30 September 2007.

The increase in the Share Capital and Share Premium accounts for the year ended 30 September 2008 reflects the issue of new shares for cash on 28 March 2008 to raise £8.56 million (£7.37 million net of expenses).

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 results of operations and financial conditions, market estimates, the Company's plans and objectives for future operations, including future revenues, financial plans and expected expenditures and divestments.  All forward-looking statements in this report are based upon information known to the Company on the date of this release.  The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events of otherwise.

It is not reasonably possible to itemise all of the many factors and specific events that could cause the Company's forward looking statements to be incorrect or that could otherwise have a material adverse effect on the future operations or results of the Company.

Unaudited consolidated income statement
For the year ended 30 September 2008

		12 months to 30 September		13 months to 30 September
		2008		2007
	Note	£		£
Revenue	2	2,623,433		3,121,018
Cost of sales		(168,609)		(250,057)
Gross profit		2,454,824		2,870,961
Other income		335,186		-
Research and development expenses		(4,249,670)		(7,500,404)
Selling, general and administrative expenses		(1,284,678)		(1,922,340)
Operating loss		(2,744,338)		(6,551,783)
Interest receivable and similar income		269,528		217,396
Interest payable and similar charges		-		(30)
Loss on ordinary activities before taxation		(2,474,810)		(6,334,417)
UK tax credit on loss on ordinary activities	3	200,108		521,168
Loss for the period		(2,274,702)		(5,813,249)
Basic and diluted loss per ordinary share (pence)	4	(3.0)		(10.9)

All revenue and expenses shown above were generated from continuing operations.

Unaudited consolidated balance sheet
As at 30 September 2008 

		12 months to 30 September		13 months to 30 September
		2008		2007
	Note	£		£
Non-current assets
Property, plant and equipment		204,220		199,832
Intangible assets		99,400		-
Non-current assets		303,620		199,832
Current assets
Inventories	5	400,231		683,483
Trade and other receivables	6	483,875		508,613
Current tax receivable		200,108		521,168
Money market investments		5,500,000		-
Cash and cash equivalents		1,607,067		2,240,947
Current assets		8,191,281		3,954,211
Current liabilities
Trade and other payables	7	(1,333,586)		(1,353,381)
Net assets		7,161,315		2,800,662
Share capital		945,484		556,063
Share premium		55,671,139		48,685,559
Other reserves (deficit)		(204,211)		(204,211)
Profit and loss account (deficit)		(49,251,097)		(46,236,749)
Shareholders' funds		7,161,315		2,800,662

Unaudited consolidated statement of changes in shareholders' equity
For the year ended 30 September 2008

	Share capital	Share premium	Other reserves	Profit and loss account (deficit)	Total
	£	£	£	£	£
Balance at 1 September 2006	511,809	47,156,708	(204,211)	(40,986,702)	6,477,604
Loss for the period	-	-	-	(5,813,249)	(5,813,249)
Share issue costs recovered	-	39,564	-	-	39,564
Issue of equity share capital	44,254	1,489,287	-	-	1,533,541
Equity share options charge	-	-	-	563,202	563,202
Balance at 30 September 2007	556,063	48,685,559	(204,211)	(46,236,749)	2,800,662
Loss for the period	-	-	-	(2,274,702)	(2,274,702)
Issue of equity share capital	389,421	6,985,580	-	-	7,375,001
Purchase of shares in Phytopharm plc	-	-	-	(2,220)	(2,220)
Equity share options charge	-	-	-	(737,426)	(737,426)
Balance at 30 September 2008	945,484	55,671,139	(204,211)	(49,251,097)	7,161,315

Unaudited consolidated cash flow statement
For the year ended 30 September 2008 

	30 September		30 September
	2008		2007
	£		£
Cash flow from operating activities
Operating loss	(2,744,338)		(6,551,783)
Depreciation	90,439		97,164
Gain on disposal of property, plant and equipment	(3,163)		(4,576)
Share option (credit)/charge	(737,426)		563,202
	(3,394,488)		(5,895,993)
Changes in working capital
Decrease in trade and other receivables	28,248		60,269
Decrease in trade and other payables	(19,796)		(384,166)
Decrease in inventories	283,252		159,416
Cash used in operations	(3,102,784)		(6,060,474)
Taxation received	521,168		604,421
Interest paid	-		(30)
Net cash used in operating activities	(2,581,616)		(5,456,083)
Cash flows from investing activities
Purchase of property, plant and equipment	(100,638)		(127,760)
Sale of property, plant and equipment	8,974		36,861
Purchase of intangible assets	(99,400)		-
Investment in shares of Phytopharm plc	(2,220)		-
Interest received	269,528		217,396
Net cash generated from investing activities	76,244		126,497
Cash flows from financing activities
Issue of shares	8,564,390		1,681,659
Share issue costs	(1,192,898)		(148,118)
Share issue costs recovered	-		39,564
Movement in money market investments	(5,500,000)		-
Net cash generated from financing activities	1,871,492		1,573,105
Movements in cash and cash equivalents in the period	(633,880)		(3,756,481)
Cash and cash equivalents at the beginning of the period	2,240,947		5,997,428
Cash and cash equivalents at end of period	1,607,067		2,240,947

Notes to the unaudited financial information
For the year ended 30 September 2008

1.    General information, accounting policies and basis of preparation

Phytopharm plc is a public limited company with a listing on the London Stock Exchange.

The preliminary announcement for the period ended 30 September 2008 is unaudited and has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union as at 30 September 2008.

During the previous financial period the Group changed its financial year end from 31 August to 30 September 2007 and accordingly the comparative period comprises trading for the thirteen months ended 30 September 2007.

The financial information in this preliminary statement does not constitute the Group's statutory accounts for the twelve months ended 30 September 2008 or the thirteen months ended 30 September 2007, but the comparative information is derived from the Group's statutory accounts for the thirteen months ended 30 September 2007.

The Group's statutory accounts for the thirteen months ended 30 September 2007 have been delivered to the Registrar of Companies; the report of the auditors on these accounts was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.

Going concern

This financial information has been prepared on a going concern basis which assumes that the Company will continue in operational existence for the foreseeable future. As at 30 September 2008 the Company had money market investments and cash and cash equivalents of £7.11 million (FY07: £2.24 million).

On 28 March 2008 the Company concluded a Placing and Open Offer and issued 38,929,048 new ordinary shares of one pence for total cash consideration of £7,371,492 after the expenses of the issue.

The Directors have reviewed the working capital requirements of the Group for the next 12 months and beyond. In order to support the development of the Company's product candidates, the Company plans to incur future expenses which will be considerably in excess of revenue, thereby continuing to incur operating losses. Following the Placing and Open Offer referred to above, the Directors believe that the Company will have sufficient resources to continue as a going concern for at least a period of 12 months from the date of approval of these financial statements. In order to maintain our priority programmes, it is our intention is to achieve substantial cost savings while continuing to pursue sources of non-dilutive revenue. Additional funds such as charitable income, collaboration deals and/or further financing may be required to allow further scope for product development. The availability and timing of such additional external funds represents a material uncertainty.

2.    Business and geographical segments

Income by destination

	12 months to 30 September		13 months to 30 September
	2008		2007
	£		£
Revenue
Europe	2,432,418		2,957,196
United Kingdom	180,606		163,822
Asia	10,409		-
	2,623,433		3,121,018
Other income
USA (i)	335,186		-
	2,958,619		3,121,018

(1)  Represents grant income received

3.    Tax on loss on ordinary activities

	12 months to 30 September		13 months to 30 September
	2008		2007
	£		£
Current tax:
Current UK corporation tax credit on loss for the period	200,108		521,168

There is no corporation tax charge because of the incidence of tax losses (2007: £nil).  The Company has taken advantage of the Research and Development corporation tax credits introduced in the Finance Act 2000 whereby a Company may surrender corporation tax losses incurred on research and development expenditure for a corporation tax refund at the rate of 24 pence in the pound of actual spend to 31 July 2008 and 24.5 pence in the pound of actual expenditure from 1 August 2008.

4.    Loss per ordinary share

The calculation of basic and diluted loss per share on the net basis is based on the loss on ordinary activities after taxation, namely £2,274,702 (2007: £5,813,249) and on 75,452,138 (2007: 53,567,257) ordinary shares, being the weighted average number of ordinary shares in issue and ranking for dividend during the period.

For diluted loss per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.  Since the Group is loss making there is no such dilutive impact.

5.    Inventories

	30 September		30 September
	2008		2007
	£		£
Finished goods and goods for resale	69,708		-
Work in progress	126,292		249,888
Raw materials and consumables	204,231		433,595
	400,231		683,483

6.    Trade and other receivables

	30 September		30 September
	2008		2007
	£		£
Trade receivables	54,330		227,568
Other receivables	27,427		96,477
Prepayments and accrued income	402,118		184,568
	483,875		508,613

7.    Trade and other payables

	30 September		30 September
	2008		2007
	£		£
Trade payables	343,461		242,839
Other payables	14,596		15,064
Other taxation and social security	44,689		48,165
Accruals and deferred income	930,840		1,047,313
	1,333,586		1,353,381

8.    Post balance sheet events

Board Changes

On 13 November 2008 Phytopharm announced that it had received notice of termination of employment contract from Dr Daryl Rees, Chief Executive Officer and Mr Piers Morgan, Chief Financial Officer. 

Hoodia extract

On 14 November 2008 Phytopharm informed its shareholders that it is in discussions with Unilever, its partner for the development of Hoodia extract as a functional food targeting weight management, with a view to mutually terminating their agreements. 

 

END

 

 

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