Phytopharm and Unilever Enter into a Licence and Joint Development Agreement for Hoodia Gordonii Extract.

GODMANCHESTER, United Kingdom -- Agreement includes provisions for substantial milestone payments, stage payments and royalties

Phytopharm plc (NASDAQ:PHYOF)(LSE:PYM) ("Phytopharm") announced today that it has granted an exclusive global licence to its Hoodia gordonii extract to Unilever plc, the global consumer products company and owner of a number of the world's leading brands.

As part of the agreement, Unilever will commit to initial payments totalling approximately GBP 6.5 million ($12.5 million) out of a potential total of GBP 21 million ($40 million) in payments to Phytopharm. In addition Phytopharm will receive an undisclosed royalty on sales of all products containing the extract.

The extract of Hoodia gordonii, a South African plant, was licensed exclusively by Phytopharm from the South African Council for Scientific and Industrial Research (CSIR) in 1997. Phytopharm has been actively developing the extract for incorporation into weight loss products.

Unilever and Phytopharm will collaborate on a five stage research and development programme of safety and efficacy studies with a view to bringing new products to market. Unilever will also manage a separate agronomy programme and will support the international patent programme for the products.

Obesity has reached epidemic proportions globally, with more than 1 billion adults overweight -- at least 300 million of them clinically obese -- and is a major contributor to the global burden of chronic disease and disability (Source: World Health Organisation).

Commenting on today's announcement, Dr. Richard Dixey, Chief Executive Officer of Phytopharm, said: "We are delighted to enter into this agreement with the global leader in weight management products. Our partnership with Unilever supports the development of this product with milestones and a fully funded programme and we look forward to generating royalty income from our partner's globally recognised brands."

A conference call for analysts and investors will be held at 8.30am today. Please call Mo Noonan on 020 7269 7116 for details.

NOTES TO EDITORS

Unilever

Unilever is one of the world's largest consumer products companies with annual sales of $48.4 billion in 2003. It produces and markets a wide range of foods and home and personal care products including Becel, Bertolli, Birds Eye, Blue Band, Country Crock, Findus, Flora Pro-Activ, Heart, Hellmann's, Iglo, Knorr, Lipton, Rama, and SlimFast. Unilever operates in more than 100 countries around the globe and employs approximately 230,000 people.

CSIR

The CSIR is the largest public Research and Development organisation in Africa. It has a turnover of US$150 million and a staff complement of approximately 2500 specialist scientists, engineers, technologists and support staff who undertake broadly-based, market-driven research and development for the benefit of the commercial market place, as well as urban and rural communities in South Africa and the region. In 2003, the CSIR entered a benefit sharing agreement with the South African San Council, who represent the peoples whose traditional use led to the investigation of the Hoodia plant.

Phytopharm plc

Phytopharm is focused on the research and development of novel pharmaceutical and functional food products based on clinical and pre-clinical data generated from medicinal plant extracts. The Company has seven development programmes in four disease areas: neurodegeneration, obesity and metabolic disease, dermatology and inflammation and has a portfolio of two marketed veterinary products.

More information concerning Phytopharm's activities can be found on its web site at http://www.phytopharm.com.

This press release may contain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934 with respect to the financial condition, results and business achievements/performance of Phytopharm and certain of the plans and objectives of its management. These statements are statements that are not historical facts. Words such as "should," "expects," "anticipates," "estimates," "believes" or similar expressions, as they relate to Phytopharm, are intended to identify forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect Phytopharm's current expectations and assumptions as to future events and circumstances that may not prove accurate. There is no guarantee that the expected events, trends or results will actually occur. Any changes in such assumptions or expectations could cause actual results to differ materially from current expectations.