UPDATE 2-Unilever abandons Phytopharm weight-loss product
November 15th, 2008 | by admin |* Unilever to terminate Hoodia weight-loss agreements
* Phytopharm shares fall 31 percent
(Adds details, analyst comments)
By Ben Deighton
LONDON, Nov 14 (Reuters) - Consumer goods giant Unilever(ULVR.L: Quote, Profile, Research, Stock Buzz) dealt a blow to British drugs-from-plants firmPhytopharm (PYM.L: Quote, Profile, Research, Stock Buzz) on Friday by abandoning plans to develop itsHoodia product as a functional food to help people lose weight.
The deal represented about half of the company’s overallvalue, according to analyst Robin Davison at Edison.
“I had done a valuation which was about a 105 mln pounds …about half of that was Hoodia and half was the rest,” he said.
Unilever abandoned the deal because Hoodia metabolised tooquickly in a liquid-based product, the company said.
The problem means that the Hoodia extract would not work aspart of Unilever’s Slimfast range, which is widely understood tobe the purpose for which it was bought by the Anglo/Dutch firm.
On Thursday CEO Daryl Rees and CFO Piers Morgan resignedfrom Phytopharm because of a disagreement with the board overthe terms under which the Unilever agreement would be ended.
Phytopharm said in a statement there had been no materialchange in the financial position of the company.
Investors, however, were concerned by the setback for itsmost important product and the shares fell 31 percent to 6 penceby 1517 GMT.
At 6 pence the company has a market capitalisation of about5.7 million pounds, less than the cash balance it reported atits half way point of 8.8 million pounds. (Additional reporting by Ben Hirschler)
