Shares in troubled Phytopharm have risen on the news that the company has been given the green light by regulators in the UK to begin trials for its Parkinson's disease drug, Cogane.

The firm has received approval from the Medicines and Healthcare Products Regulatory Agency and Research Ethics Committee to begin recruitment for the study. Interim chief executive Sandy Morrison noted that pre-clinical studies have shown that Cogane reverses the changes in the area of the brain involved in Parkinson's disease.

The treatment works by inducing the body's own production of proteins known as neurotrophic factors, Phytopharm said. One of these factors, known as GDNF, has been shown to be particularly effective in re-growing damaged nerves but as a protein, it cannot be given in oral form as it degrades in the stomach and small intestine and also does not readily cross the blood-brain barrier.

GDNF can work only when injected into or when produced inside the brain, the company noted, and while direct injection has shown “substantial beneficial effects” in small-scale studies, it requires “highly complex and difficult surgical procedures”. However Cogane potentially overcomes these difficulties as it can be taken orally, “readily crosses the blood-brain barrier” and stimulates the release of GDNF in the brain. In total, 18 healthy volunteers and up to 18 patients with Parkinson's Disease aged between 40-80 years, are planned to be enrolled in the trial.

The Godmanchester-based firm has been suffering since November last year when consumer goods major Unilever terminated an agreement to develop Hoodia extract as a functional food targeting weight loss in its popular SlimFast meal replacement range. That led to a restructuring and the loss of 40% of the workforce, with Phytopharm saying that it would now focus on Cogane and Myogane, its treatment for Lou Gehrig’s disease.

Commenting on the Cogane news, Robin Davison at Edison Investment Research said that securing non-dilutive (ie grant) funding for the product is vital to help Phytopharm pay for Phase II studies and attract a development partner. Phytopharm has enough cash to fund operations up to the third quarter of 2010.