The biotechnology minnow Phytopharm received a huge share price boost yesterday after announcing that early trials of its potential Parkinson's disease treatment had produced impressive results.
Phytopharm's shares closed up 339.6 per cent at 26.95p after the group said that during an 18 week study, Cogane reduced Parkinsonian disability in monkeys by 43 per cent. The Michael J Fox Foundation , established after the American actor was diagnosed with the disease, contributed $1.16m (£725,000) for the study.
In a separate phase 1b clinical trial, Cogane was found to be safe in both healthy volunteers and Parkinson's disease suffers.
The trial results represent a significant improvement in the fortunes of Phytopharm. In October last year hopes over its leading product crumbled after Unilever scrapped plans to use Hoodia, a naturally occurring appetite suppressant, in its SlimFast diet drinks. Phytopharm had spent several years, and lots of investor money, developing Hoodia for use in the drinks.
"The plan was always to use the cash from Hoodia sales to develop the pharmaceutical side of the business," said Phytopharm's chief executive, Sandy Morrison. "When that failed we had to reassess what we had and decided that Cogane was the jewel in the crown. After the initial trial results, it will come as no surprise that we will be looking at multiple millions of funding in the not too distant future."
Despite the share price jump yesterday, some biotech fund managers pointed out that Cogane is still a long way from being a commercial success.
"The news from Phytopharm is certainly good, but some people are getting carried away," said Andy Smith of Axa Framlington. "It could be as long as 10 years before this product comes to market, and that will include three or four funding rounds. Statistically, more than 90 per cent of treatments at this stage fail to make it to market."
The group said it will take advice from its broker KBC Peel Hunt, on raising funds for the next stage of clinical trials. A share placement or rights issue are the most likely methods.