UK biotech Phytopharm reported widening losses in the year ended August 31 as revenues dropped and the company increased spending on its pharmaceutical programmes.

Shares in Phytopharm lost more than 10% of their value on the back of the figures, down 5.5 pence to 46.5 pence in late-morning trading.

The company, which develops products based on standardised plant extracts and has drugs in development for Alzheimer’s disease and amyotrophic lateral sclerosis (ALS), reported a loss of £5.6 million, up from £3.3 million a year ago, while revenues plunged to £1.9 million from £7.4 million.

The decline was a result of ‘timing variations’ on income arising from collaborations with Unilever in the area of weight-reducing food ingredients and Schering-Plough for Phytopica, a treatment for eczema in animals.

Phyopharm booked £660,000 out of a promised £3.5 million from its deal with Unilever, and said it expects the balance to arrive in fiscal 2007. Sales of Phytopica, which was launched in April, contributed £220,000.

Updating on its pharmaceutical pipeline, Phytopharm said it was preparding for ‘further clinical studies’ of its Alzheimer’s candidate Cogane (PYM50028) which was unable to show a significant improvement in cognitive function over placebo in a Phase II study reported last year.

The company also said it had developed a new liquid formulation of ALS candidate Myogane (PYM50018) and is completing safety studies to support further clinical studies planned for the first half of next year.