Unilever is severing a multi-million euro arrangement with UK-based hoodia supplier, Phytopharm, after concluding the South African plant extract did not meet both safety and efficacy requirements.
Despite spending more than €20m over four years researching and developing the ingredient in conjunction with Phytopharm, Unilever told NutraIngredients.com the project would not be pursued.
“Data suggests using the extract would not meet our safety and efficacy standards,” said Unilever global media relations director, Trevor Gorin. “We have entered talks with Phytopharm to end the partnership.”
But Gorin would not reveal the safety and efficacy grounds on which the ingredient failed Unilever, nor why such information was not available before Unilever and Phytopharm signed the deal in December, 2004.
Quite a blow
The split has left Phytopharm in some disarray, with chief executive officer, Daryl Rees, and chief financial officer, Piers Morgan, resigning over an undisclosed dispute about the terms of the dissolution.
A Phytopharm spokesperson said testing on liquid products revealed the ingredient metabolised too quickly, therefore rendering it redundant for use in Unilever’s Slimfast weight management range.
Analysts estimated Unilever’s withdrawal would suck about half the market value out of Phytopharm, whose stock price fell about 30 per cent last Friday and sat at 6.5 pence on the London Stock Exchange in early afternoon trading today, marginally higher than yesterday.
“It is quite a blow,” he said, “but it does free us up now to talk with other potential partners and develop other food matrices. There has been a constriction in that we have been focused on drinks.”
He said there were no question marks about the ingredient’s safety, noting the ingredient’s “solid safety profile”.
“And there has never been any question marks about efficacy,” he added.
While Unilever was keen to point out it had never made such a statement, analysts speculated Unilever had slated hoodia for its flagship, €300m+, weight control brand.
Gorin said while €20m was a lot of money to throw at an ultimately futile project, it represented a small part of Unilever’s annual €900m R&D budget.
“Because of the novelty of the ingredient this partnership has drawn a lot of attention and we obviously would have liked it to come to fruition but it hasn’t and so we move on,” Gorin said.
When asked if Unilever was of the opinion hoodia did not work as a weight-loss ingredient, Gorin said, “not in Unilever-branded products”.
Hoodia gordonii is a small cactus that grows in the Kalahari desert and is believed to act as a "satiety stimulator". Phytopharm gained a global license to market it in 1997.
Its flesh has been eaten by the San people of the Kalahari desert for centuries to suppress appetite and research has isolated a molecule within the plant, given the name P 57, that appears to possess appetite suppression properties.
A number of in vivo and in vitro trials have demonstrated similar effects and more are underway.
The global license agreement was granted to Unilever in December 2004, after a pharmaceutical deal with Pfizer fell through.
Phytopharm turned in a €2.27m loss for the six month period to March 31, where it noted cash reserves of more than €10m. At the time those results were released in June, Unilever said it was “satisfied” with its hoodia investment.
Unilever R&D programme director, Kevin Povey, said: "We are satisfied with the good progress to date with hoodia and anticipate submitting our GRAS notification to FDA in late 2009, subject to the programme continuing to advance in line with our current expectations."