Pfizer has pulled out of its partnership with UK biotech company Phytopharm to develop an obesity treatment based on a cactus plant.

Pfizer says it has ended the £13 million licence deal because of internal restructuring and the closure of its Nutrraceutical group, and was not related to the efficacy of the drug, named P57

The US company began preparatory work for a phase I study of the appetite suppressant drug in March, but its acquisition of Pharmacia and subsequent restructure means it has now released the rights, leaving Phytopharm free to license P57 to other companies.

The announcement wiped nearly a third of Phytopharm share price, but Chief Executive Dr Richard Dixey remained confident about the drug's chances.

Commenting on the parting with Pfizer, he said: "It is cash neutral, and in the long run could be to our benefit. Pfizer have stressed the drug is worthy of further development and said we are free to re-license".

"With the global market for anti-obesity drugs estimated at $8 billion a year, there is a lot of interest. I estimate we will have re-licensed within six months and, as we will be further forward in our research, it will be a substantially better deal than the one we had with Pfizer".

In May the company announced an agreement with Yamanouchi to develop and market PYM50028, its novel oral treatment for dementias including Alzheimer's disease.

A UK-based phase II proof of principle study of the drug will begin in the fourth quarter of 2003 in collaboration with the Oxford Project to Investigate Memory and Ageing (OPTIMA), part of the University of Oxford's department of pharmacology.

pharmafocus@pharmafile.co.uk