Phytopharm near to deal on hoodia products?

UK firm Phytopharm, which has isolated the appetite-suppressing ingredients in the desert plant hoodia, says it is in advanced talks to license its compound to a food industry partner.

The company has invested more than $18 million in research on its P57 molecule, since first identifying active fractions of the hoodia plant, an extremely rare cactus native to the Kalahari desert, in 1997.

It had initially struck a deal with drug company Pfizer to bring the product to market but after this fell through last year, it set its sights on the booming meal replacement market.

Reporting growing losses last week, chief executive Richard Dixey said advanced discussions with a licensing partner were ongoing.

Some analysts believe that a deal with a major food company could be worth more than $50 million a year in royalties, with pressure on the food industry to stem the rise in obesity driving demand for new, natural weight loss ingredients.

Earlier this year, it raised approximately £6.5 million (€9.7m) through a share placement to increase supplies of the raw material in anticipation of new licensing agreements.