PYN Phynova

RNS Number:8640Q
Phynova Group PLC
27 March 2008




Press release                                                      27 March 2008


                               Phynova Group plc

                                  ("Phynova")


      Phynova secures funding to progress the US Phase IIb clinical trial
         of lead product PYN17 and to advance drug pipeline development


Phynova Group plc (AIM: PYN), the developer of prescription pharmaceuticals
derived from plants used in Chinese medicines, today announces that it has
successfully obtained commitments to provide in excess of �1.1 million through a
placing of new ordinary shares at 40 pence per share with existing investors and
private investors who will benefit from the tax reliefs offered by the UK
Government's Enterprise Investment Scheme ("EIS"). Its financial adviser on the
transaction was Merchant Securities Group Ltd.  Final details of the new
ordinary shares placed will be announced shortly, at which point an application
will be made to admit the new ordinary shares to trading on AIM.

Phynova will use part of the new funds to initiate a multicentre, double-blind,
placebo-controlled Phase IIb efficacy trial of its lead drug candidate, PYN17,
for treating the debilitating symptoms and impaired liver function associated
with Chronic Hepatitis C.  This follows the successful confirmation of the
safety and tolerability of PYN17 in a 39 patient Phase I/II study completed in
November 2007 and extensive interaction with the US Food and Drug Administration
(FDA) to discuss the trial design, clinical end points and the overall
development plan.  The primary objective of the trial is to evaluate the
efficacy of PYN17 in improving the symptoms, impaired health-related quality of
life (HRQoL) and liver inflammation associated with Chronic Hepatitis C.  The
Company expects the results of this study in the second half of 2009.

Hepatitis C affects over 170 million people world wide, including over four
million people in the US.  PYN17 is the only drug currently in development
specifically for the treatment of the debilitating symptoms, impaired HRQoL and
liver inflammation associated with the disease.  Currently available antiviral
treatments with pegylated interferon and ribavirin are only effective in
approximately 50% of patients treated, often with significant associated
toxicity and side effects.  As a result, it is estimated that the market for
treatments for Hepatitis C will grow to around US$9 billion by 2010.

Robert Miller, Phynova's CEO, said: "This successful financing will allow
Phynova to progress clinical development with PYN17, a drug that represents real
hope for Chronic Hepatitis C sufferers, who are often left with the debilitating
symptoms of the disease even after it has apparently been successfully treated
with antiviral drugs.  Progress on PYN17 is currently being monitored by several
potential pharma partners.  As well as supporting PYN17's clinical development,
Phynova will continue to fund its other pipeline candidates, all of which have
progressed significantly in development over the last 12 months.  It is
especially pleasing that we have attracted commercial interest right across the
pipeline at such comparatively early stages of development.


Key pipeline developments include:

  *   PYN22, for the treatment of non alcoholic fatty liver disease, is 
      Phynova's next clinical candidate. A regulatory dossier is now in 
      preparation and commercial due diligence and licensing discussions are 
      taking place with several companies.
  *   PYN6, the novel antibacterial agent active against MRSA and acne, has 
      shown better activity against MRSA than the most commonly used topical 
      antibiotic, mupirocin.  Phynova is now preparing a topical formulation 
      and a preclinical package; a new patent application has been filed; and 
      commercial discussions are underway with several acne treatment companies.
  *   PYN18, the novel antiviral agent has been shown in studies carried out at 
      the Rega Institute in Belgium (one of the world's leading virology 
      centres) to have activity against hepatitis C virus and against dengue 
      virus, the virus which causes Dengue Fever.  New patent applications 
      have been filed and PYN18 has attracted interest from several companies 
      in the antiviral field.
  *   PYN9, the candidate treatment for post-operative ileus, i.e. bowel 
      blockage that can follow abdominal surgery. An IND has been applied for 
      by Phynova's Chinese partner, Botanic Century Ltd and a Chinese clinical 
      study is expected to begin in 2008.  Phynova is preparing a preclinical 
      development plan for Europe and the Company is already in commercial due 
      diligence for PYN 9 with a mid cap European speciality pharma company.
  *   PYN7, the cancer drug candidate, has shown promising activity against a 
      range of cancer cells.  Work is continuing with collaborators in 
      Birmingham (UK) and Hong Kong to explore the mechanisms of action and 
      activity against tumour grafts."


                                    - Ends -



For further information, please contact:


Phynova Group plc                                            +44 (0) 1993 880700
Robert Miller, Chief Executive Officer                           www.phynova.com

Merchant Securities Group Ltd                               +44 (0) 20 7375 9060
Anthony Fabrizi

Nominated Adviser:
Nabarro Wells & Co. Limited                                 +44 (0) 20 7710 7400
Marc Cramsie

Broker:
Evolution Securities China Limited                          +44 (0) 20 7220 4878
Barry Saint

Media enquiries:
Abchurch Communications                                     +44 (0) 20 7398 7700
Peter Laing/Ashley Tapp/Stephanie Cuthbert
ashley.tapp@abchurch-group.com                            www.abchurch-group.com





Notes to Editors:

About Phynova

Phynova is a UK company developing prescription pharmaceuticals derived from
plants used in Chinese medicines. Phynova is focused on viral and metabolic
diseases and cancer. Phynova's lead product for Hepatitis C has now completed a
Phase I/II trial in the US and the Phase IIb trial is scheduled to commence in
the first half of 2008. Two further products, for fatty liver disease and
post-operative ileus, are targeted for entry to the clinic over the next six
months and there are a further four products in preclinical development. For
further information please visit www.phynova.com.


About Hepatitis C and Phynova's clinical candidate PYN17

Hepatitis C is a liver disease caused by the Hepatitis C virus. Hepatitis C is
usually transmitted by injections of illicit drugs, or through exposure to
contaminated blood or blood products. Symptoms include fatigue, abdominal
discomfort or tenderness, muscle and joint pain, nausea and loss of appetite.
These symptoms commonly persist in patients even after viral clearance following
interferon-ribavirin therapy and may be so severe as to prevent patients from
working so the economic impact is considerable.  Furthermore Chronic Hepatitis C
can result in cirrhosis of the liver, which can lead to liver failure and other
serious complications, and liver cancer.

Hepatitis C affects over 170 million people world wide, including over four
million people in the US. Currently available antiviral treatments with
pegylated interferon and ribavirin are only effective in approximately 50% of
patients treated, often with significant associated toxicity and side effects.

Phynova believes that PYN17 is the only drug currently in clinical development
specifically designed to treat the debilitating symptoms of Chronic Hepatitis C.
It is based on a novel formulation of four plant extracts that have a long
history of safe and efficacious use in the treatment of liver ailments in Asia
and the West.



For further information please visit www.phynova.com;




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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