BioWorld International Correspondent

LONDON - Phytopharm plc fell victim to the fallout from Pfizer Inc.'s $66 billion acquisition of Pharmacia Corp., as Pfizer dropped development of P57, an obesity treatment based on a plant extract discovered by Phytopharm.

The news dropped Phytopharm's stock about 33 perecent, down 85 pence to £1.75, but the company's CEO Richard Dixey was upbeat, claiming he would be able to relicense the appetite suppressant at a higher price.

"Normally products are returned because they don't work - that's not the reason Pfizer returned P57," Dixey said in a conference call. Rather, Pfizer is handing back full rights, he said, because it is closing the Natureceuticals group as part of the post-merger restructuring.

However, that begs the question of why Pfizer could not find another home for the product, which completed a Phase II proof-of-principle study in December 2001 and demonstrated it reduced calorific intake by up to 1,000 calories per day. Dixey agreed it was "an odd decision" not to put P57 elsewhere, but said, "I can only assume [Pfizer] has got so much on its plate that it gave [P57] back."

Dixey said he would like to find a new partner on better terms within the next six months.

Phytopharm, based in Godmanchester, UK, has another obesity product, P64, based on semisynthetic analogues of P57, an extract of a South African plant called hoodia. The P57 program also includes other semisynthetics. The two programs will now be amalgamated as Phytopharm seeks a worldwide licensing deal.

Dixey said: "We were always talking about licensing P64 next year, so in terms of resources there is no effect. Why do we think we can do it so quickly? Four multinational [pharmaceutical companies] have got to the point of signing expressions of interest [in P64]."

The up-front fee for any deal would be larger than the next milestone that was due from Pfizer, he said, adding, "We will get a better-looking license than we got from Pfizer."

When that license was agreed to in August 1998, the P57 program consisted of a single natural plant extract. There is now a series of analogues, six patents and a data file that "stands four to five feet high," Dixey said.

It would be up to the future partner to decide whether or not to take the natural extract forward, but Dixey doesn't see that happening because the semisynthetics are only one year behind, with the lead compound expected to enter clinical development next year. He wants a new partner to be in place to help co-select a lead.

Phytopharm's supply of hoodia and the manufacturing capacity it has put in place to extract P57 will remain in limbo until a new partner is found. It would be possible to register the plant extract in the U.S. as a nutraceutical, but Dixey said it would be in bad faith to launch a natural product while seeking a partner for the synthetics.

Dixey said that at times he has been frustrated by the paucity of information and the lack of progress with P57 under Pfizer's guidance. "Pfizer had control over news flow and we had no ability to probe what they were doing," he said. "In future licensing we will endeavor to get better control."