An ancient oriental tonic has yielded a new drug which claims to reverse the effects of Alzheimer's disease.

An Oxford research centre is recruiting about 80 volunteers to test the drug, following a £500,000 deal with Cambridge biotech company Phytopharm.

The Oxford Project to Investigate Memory and Ageing (Optima) is to carry out clinical trials on the drug, known as PYM50028, under the joint leadership of Professor David Smith and Professor Robin Jacoby.

Prof Smith said some of the 80 would be recruited from memory clinics in Oxfordshire.

Phytopharm chief executive Richard Dixey said: "Optima is an excellent partner for the recruitment and evaluation of PYM50028 in patients with dementia.

"Their proven clinical investigative capabilities and expertise in the field provides Phytopharm with an important advantage in ensuring the rapid clinical development of this innovative therapeutic agent."

He said the potential drug was isolated from a yin tonic, used to promote health in Chinese and Asian medicine.

"It does not just protect nerve cells against aging -- it causes them to regrow," he said.

Prof Smith said: "Brain degeneration plays a central role in the pathology of dementia, and agents with the ability to reverse this process represent a potentially significant therapeutic advance."

Elderly people with memory loss will be enrolled into a phase II study, which is expected to start this autumn. Healthy volunteers have already tested the drug's safety.

The drug will be compared with a placebo.

An interim safety analysis will be conducted next spring and the study should be completed by the end of 2004. However, if this trial is successful another will be needed and any drug is not likely to be on the market before 2008.

Optima also stands to benefit from a £2.75m appeal to commemorate Oxford novelist and philosopher Dame Iris Murdoch, a former philosophy tutor and fellow at St Anne's and a north Oxford resident, who died after a long battle with Alzheimer's. A Professorship in Old Age Psychiatry is one of the aims of the appeal.