Drug may fatten Phytopharm profits

SHARES in drugs group Phytopharm rose sharply on hopes that it has discovered a cure for obesity. But pay-day could be years off. Chief executive Richard Dixey said: 'Test results are encouraging. Our treatment works on the brain to make people feel they have no appetite.'

The company, which collaborates with US giant Pfizer, has produced P57, a treatment derived from a rare six-foot cactus found in southern Africa's Kalahari desert. A group of overweight men endured 15 days of tests. Those using P57 were found to have eaten less. Max Herrmann at ING Barings said: 'The results look very positive for a small study.'

Phytopharm rose 37 1/2p to 477 1/2p, reflecting the effect clinical trials can have on share prices. But P57 has to survive further rigorous tests and could be at least five years from launch.

Phytopharm's full-year losses widened from £2.2m to £2.9m. It is also working on possible treatments for Alzheimer's disease and bowel cancer. An obesity drug could be a blockbuster. But, for now, the shares remain highly speculative.