The company will use a UK placing, US private placement and open offer of 13.3 million new shares to raise the funds, designed to allow for development of its existing pharmaceutical and functional food products.

It is also seeking to expand the number of product candidates in its pharmaceuticals pipeline.

Phytopharm recently raised approximately £6.5 million (€9.7m) through a share placement to increase production of the hoodia plant by 100 times its current capacity.

Its hoodia compound, shown to suppress appetite, has been licensed for use by Unilever in a £21 million deal announced in December.

The first new hoodia products are expected to reach the market in three years. The new shares, which will increase Phytopharm's issued share capital by 30.8 per cent, will be priced at about 180p each. This represents a discount of 15p or 7.7 per cent to the closing price of 195p on Tuesday.

Phytopharm's shares rose 3.8 per cent to 2021/2p in midday trading in London.