LONDON - The botanicals specialist Phytopharm plc raised #10.8 million (US$15.7 million) for a Phase II trial of P58 in Alzheimer's disease, following positive results in Phase I.

CEO Richard Dixey told BioWorld International, "This was in no way a fund raising for general expenses; we have enough money in the kitty. We have always said to shareholders, if we get something big, we will ask for money. We presented the pharmacology for P58, and raised the money in four days.

"The offer was more than two times oversubscribed, and new institutions came in, broadening the investor base and bringing in foreign institutions."

The company, based in Godmanchester, Cambridgeshire, placed 1.8 million shares at #6.25 per share, a nominal premium to the Nov. 28 closing price of #6.24.

Dixey added that seven pharmaceutical companies are currently studying the P58 data with a view to partnering.

According to Phytopharm, P58 has a novel mode of action, reversing the age-related decline in brain cell receptors, which is a central feature of all age-related dementias, including Alzheimer's disease and senile dementia.

Dixey said the compound also could have other applications, for example in neuromuscular complaints such as cardiac insufficiency, and the company will now gather evidence for further indications. P58 is derived from traditional herbal treatments for senile dementia.

The Phase I dose-escalating study in 20 healthy volunteers showed no safety problems with orally administered P58, and there was a linear relationship between dose and plasma concentration.

Dixey said the Phase IIa study will start in the summer. Although he is keen to partner the compound, he said having the money to develop it in house would enable Phytopharm to extract the same value from a deal, regardless of the stage of development.

The company also said that P57, its appetite suppressant treatment for obesity being developed with Pfizer Inc., will enter a Phase IIa study in the first quarter of 2001. Phytopharm has discovered additional pharmacological properties of P57, showing that it restores glycemic control in a model of Type II diabetes, and opening up the potential of a second major application.