UPDATE 2-Unilever abandons Phytopharm weight-loss product

* Unilever to terminate Hoodia weight-loss agreements

* Phytopharm shares fall 31 percent

(Adds details, analyst comments)

By Ben Deighton

LONDON, Nov 14 (Reuters) - Consumer goods giant Unilever (ULVR.L) dealt a blow to British drugs-from-plants firm Phytopharm (PYM.L) on Friday by abandoning plans to develop its Hoodia product as a functional food to help people lose weight.

The deal represented about half of the company's overall value, according to analyst Robin Davison at Edison.

"I had done a valuation which was about a 105 mln pounds ... about half of that was Hoodia and half was the rest," he said.

Unilever abandoned the deal because Hoodia metabolised too quickly in a liquid-based product, the company said.

The problem means that the Hoodia extract would not work as part of Unilever's Slimfast range, which is widely understood to be the purpose for which it was bought by the Anglo/Dutch firm.

On Thursday CEO Daryl Rees and CFO Piers Morgan resigned from Phytopharm because of a disagreement with the board over the terms under which the Unilever agreement would be ended.

Phytopharm said in a statement there had been no material change in the financial position of the company.

Investors, however, were concerned by the setback for its most important product and the shares fell 31 percent to 6 pence by 1517 GMT.

At 6 pence the company has a market capitalisation of about 5.7 million pounds, less than the cash balance it reported at its half way point of 8.8 million pounds. (Additional reporting by Ben Hirschler)