UK start-up Phytopharm has turned in a £1.8m (€2.27m) loss for the six month period to March 31, but is buoyant about its future in the weight management area that is being backed by food giant Unilever.
Unilever and Phytopharm partnered in 2005, with Unilever committing to more than £21m (€26.5m) in research and development funding for Phytopharm's weight loss ingredient, an extract of the hoodia gordonii cactus, over five years.
The two companies have said Food and Drug Administration GRAS (generally regarded as safe) approval will be sought in 2009. A Unilever product containing hoodia is expected within three years, and will probably form part of its weight managing SlimFast range. Slimfast is a $500m (€322m) brand.
Such a launch had the potential to bring substantial royalties to Phytopharm, the company said, but the details of its royalty arrangements with Unilever were not revealed.
"[The] weight management product continues to make good progress through the various stages of the development programme, in collaboration with Unilever," the company said.
Hoodia gordonii is a small cactus that grows in the Kalahari desert and is believed to act as a "satiety stimulator". Phytopharm gained a global license to market it in 1997.
Its flesh has been eaten by the San people of the Kalahari desert for centuries to suppress appetite and research has isolated a molecule within the plant, given the name P 57, that appears to possess appetite suppression properties.
A number of in vivo and in vitro trials have demonstrated similar effects and more are underway.
In the half-year period the company reported after-tax loss of £1.8 (€2.27m) compared with £2.9m (€3.66m) in the previous six-month period. These figures came on revenue of £1.4m (€1.77m) compared with £1.6m (€2.02m) in the first half of last year.
The company's cash reserves stood at £8.8m (€11.11m) after raising £7.4 (€9.35m) million through a Placing and Open offer. It also offers skin care products for dogs and pharmaceuticals but hoodia is at the centre of Phytopharm's operations and offers the most potential.
"We are satisfied with the good progress to date with hoodia and anticipate submitting our GRAS notification to FDA in late 2009, subject to the programme continuing to advance in line with our current expectations," said Kevin Povey, R&D programme director at Unilever.
Phytopharm chief executive officer, Daryl Rees, said the company had made "good progress" with hoodia and expected FDA GRAS notification in late 2009, "subject to the programme continuing to advance in line with our current expectations."
"The development stages prior to submission for GRAS notification include supply chain expansion and consumer studies that will evaluate reductions in calorie intake as part of a weight management programme in the general population," Rees said, noting Unilever was "committed to fully funding the development programme."
"Unilever is also managing the agronomy programme, including scale up for launch, undertaking manufacturing and market research activities, and supporting the international patent programme for the products," he said.
Just over £2m (€2.52) was spent on hoodia research during the six month period.
The ingredient is patented in the US, UK, Europe and Japan and has patents pending in other regions.
In an assessment of market risks, Phytopharm, which has only one skin-care ingredient on-market, noted the importance of ongoing funding for its research and development activities.
"Successful commercialisation of the Group's products is likely to depend on continuing successful progress through clinical and consumer studies, and registration as applicable," the company said.
It was aware of potential hurdles in that its products, "may not meet the necessary requirements in terms of toxicity, efficacy or safety," or that "relevant regulators may not agree with the results of the Group's research and may require further testing or withhold approval altogether."