Phynova Plans Bigger China Focus

Phynova (PHNVY.PK), a botanical drug company based in Oxford, UK, says it will now re-focus its efforts on China, with an emphasis on the China market, China drugs and perhaps some China acquisitions.

Phynova has always had a China connection, including a 45% share in Botanic Century Beijing Ltd, a drug development company. Until now, Phynova has been using TCM preparations as a basis for developing drugs that would address unmet needs and pass clinical trials in the west. The company’s old business plan called for putting the preparations, after IP protection was secured, through some part of the approval process and then out-licensing them to larger biopharmas. So far, no agreements have been announced.

Phynova is not particularly flush. It is hoping for a tax refund in December that would give the company enough money to function through the end of January. Meanwhile, management is actively seeking new investment.

Formed in 2002, Phynova listed its shares on London’s AIM market in 2006. Its shares are also listed on the OTC Pink Sheets market in the US.

The change is business plan is accompanied with new assignments in the executive suite. Former CEO Robert Miller will become head of the company’s China operations, which are known as Phynova China Ltd. Non-executive director John Pool becomes the new executive chairman of the company. Dr Tony Mills, who was director of business development, becomes Phynova’s CEO.

In the company’s first six months of fiscal 2008 (ended March 31), Phynova lost 1.5 million pounds ($2.7 million). It had just 500,000 pounds ($928,000) at the end of the first half, though the company subsequently raised 1.2 million pounds ($2.2 million) at the beginning of the second half. The company announced in its first-half report that discussions about the company’s products were ongoing with several pharmaceutical companies.

Phynova’s lead drug is PYN 17, a medication that Phynova says has known anti-inflammatory and anti-fibrotic properties. The drug, which is being developed as a treatment for the symptoms of chronic hepatitis C, has completed safety and tolerability tests in Phase I/II trials. PYN 17 was found to cause no more problems than the placebo. In the active group, PYN 17 patients experienced a trend toward lower levels of serum transaminase, an accepted marker of inflammation in hepatitis C. They also saw an improvement in 6 of the 8 areas of a questionnaire that determined health related quality of life. Phynova is planning a Phase II proof of concept trial for PYN 17, but either lack of money or procedural considerations have delayed the original timetable. Phynova says the results are now anticipated sometime in 2009.

In pre-clinical development, Phynova is working on the following drug candidates:

• PYN 6 – an antibiotic with a high degree of efficiency against MRSA and potential for the treatment of acne. A patent has been filed and commercial discussions are underway.
• PYN 18 – efficacy against hepatitis C virus and dengue fever virus confirmed at Rega Institute in Belgium. New patents filed on both anti viral activities.
• PYN 7 – cell-based assays confirm potential anti-cancer activity and justify progression to next stage of preclinical development
• PYN 22 – in late preclinical development for the treatment of Non Alcoholic Fatty Liver Disease, a condition in which fat accumulates in the liver and can lead to cirrhosis and hepatocellular carcinoma.
• PYN 9 – addresses post-operative ileus, a temporary impairment of gastrointestinal motility often caused by narcotic pain drugs. A China IND application has been filed by Phynova´s China partner, Botanic Century (Beijing) Ltd.

Disclosure: none.