STOCKS NEWS EUROPE -Phytopharm plunges on placing, offer

Shares in Phytopharm (PYM.L) plummet 18.3 percent after the biotech minnow says it plans to raise 25 million pounds via a placing and open offer at 10 pence per share, mainly to fund the Phase 2 trial of its Parkinsons' drug, Cogane.

KBC Peel Hunt reduces its price target on the company to 30 pence in light of the dilution, but says the company now has the cash to complete the trial and could secure a more lucrative deal.

"If Cogane proves successful in Phase 2 trials, bettering Boehringer Ingelheim's blockbuster Parkinsons' drug, Mirapex, we could be looking at a 60 pence target price. This would equate to a more than 200 million pounds valuation", the broker says.

To see Phytopharm's statement please click on [ID:nRSC5083Da]

Reuters messaging rm://shivani.singh.thomsonreuters.com@reuters.net