XenoPort, Inc. Announces Election of Co-Promotion Option for Solzira from GlaxoSmithKline; Company to Hire 50-100 New Sales Reps to Promote Solzira if Approved

SANTA CLARA, Calif.--(BUSINESS WIRE)--XenoPort, Inc. (Nasdaq:XNPT - News) announced today that it has exercised the option contained in its Development and Commercialization Agreement with GlaxoSmithKline (GSK) to co-promote and share profits and losses from the potential future sales of Solzira™ (gabapentin enacarbil) Extended Release Tablets in the United States. Solzira is the subject of a new drug application (NDA) that is under review by the U.S. Food and Drug Administration (FDA) as a potential treatment for moderate-to-severe primary Restless Legs Syndrome (RLS).

“We have carefully analyzed this choice from both the economic and strategic perspectives,” said Ronald W. Barrett, chief executive officer of XenoPort. “We believe this decision positions us as one of the few biotechs with the potential to become an integrated biopharmaceutical company, capable of discovering, developing and commercializing innovative products that will benefit both patients and our stockholders.”

Co-Promotion Election

Assuming FDA approval of the Solzira NDA for RLS, XenoPort will field a U.S. sales force of between 50 and 100 representatives to promote Solzira. This sales force will be geographically distributed across the U.S. and will call on prescribers of drugs that treat neurological diseases.

XenoPort also announced changes to the terms of its right to co-detail in the U.S. Requip® XL™, GSK’s product for Parkinson’s disease. Previously, XenoPort was entitled to detail Requip XL commencing upon its exercise of the co-promotion option and ending upon the launch of Solzira. Under the revised terms, XenoPort has the right to commence the detailing of Requip XL around the time of the Solzira launch. XenoPort would be entitled to continue these detailing activities until the earlier of the launch of a generic form of Requip XL or July 1, 2011. XenoPort would be compensated for each detail of Requip XL completed by its sales representatives through a fee that is separate from the Solzira joint profit and loss (P&L) statement.

“As originally constructed, the GSK collaboration agreement gave XenoPort the right to detail Requip XL for a relatively short period of time prior to the launch of Solzira,” said Vincent J. Angotti, XenoPort’s senior vice president, chief commercialization officer. “We determined that it would be better to postpone the expense of building this sales force until Solzira is approved, while extending the period of time that our sales force would be able to detail a second product in concert with Solzira. We look forward to working with our GSK colleagues to launch Solzira successfully following its anticipated approval by the FDA and to provide information to healthcare providers about Requip XL.”

Solzira Joint P&L Statement and XenoPort’s Profit Share Participation

Coincident with the election of the co-promotion option, all allowable expenses and any potential future sales of Solzira will be accounted for using a joint P&L statement, and XenoPort will share in the resulting operating profits and losses. Prior to the launch of Solzira, cash payments to GSK representing XenoPort’s share of any loss will be deferred and will be repayable over a period of time following the launch.

Assuming FDA approval of the Solzira NDA for RLS, GSK would be responsible for recording the sales of Solzira in the U.S. Expenses that can be charged to the joint P&L statement are the cost of goods sold and certain costs directly related to Solzira marketing and sales. All future expenses related to the development of potential indications for Solzira in addition to RLS will not be included in the joint P&L statement and will be borne fully by GSK.

XenoPort’s exercise of the co-promotion option and its participation in the profit share arrangement may be reversed at any time upon notice to GSK with no penalty to XenoPort, in which case the original royalty-based compensation structure would apply for Solzira sales in the U.S.

About Solzira

Solzira is a new chemical entity that is designed to improve upon the pharmacokinetics of gabapentin by taking advantage of high-capacity transport mechanisms in the gastrointestinal tract to improve absorption.

About RLS

RLS is a common neurological condition that affects an estimated 12 million people in the United States across a range of severity from mild to severe. The syndrome is characterized by uncomfortable and unpleasant sensations in the legs that result in a compelling urge to move and can result in distressing symptoms that disrupt sleep and significantly impact daily activities. These RLS-related symptoms typically begin or worsen during periods of rest or inactivity, particularly when lying down or sitting, and may be temporarily relieved by movement. If approved by the FDA, Solzira could be the first non-dopaminergic treatment option with an approved indication for the treatment of moderate-to-severe primary RLS.

About XenoPort

XenoPort, Inc. is a biopharmaceutical company focused on developing a portfolio of internally discovered product candidates that utilize the body’s natural nutrient transport mechanisms to improve the therapeutic benefits of existing drugs. XenoPort is developing its lead product candidate in collaboration with Astellas Pharma Inc. and GSK. The FDA is currently reviewing the NDA filed by GSK for Solzira as a potential treatment for moderate-to-severe primary RLS. XenoPort’s product candidates are also being studied for the potential treatment of gastroesophageal reflux disease, migraine headaches, neuropathic pain, spasticity related to spinal cord injury, acute back spasms and Parkinson’s disease. To learn more about XenoPort, please visit the Web site at www.XenoPort.com.

Forward-Looking Statements

This press release contains “forward-looking” statements, including, without limitation, all statements related to XenoPort’s and its partners’ future clinical development and commercialization of Solzira and the timing thereof; the therapeutic and commercial potential of XenoPort’s product candidates; the regulatory process, and the timing thereof; the development of a XenoPort sales force, and the timing thereof; XenoPort’s right to detail Requip XL; the terms of the joint P&L statement and the sharing of profits and losses from the potential future sales of Solzira; and potential royalty payments and the timing thereof. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “anticipated,” “assuming,” “believe,” “could,” “expectation,” “future,” “may,” “potential,” “will,” “would” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon XenoPort's current expectations. Forward-looking statements involve risks and uncertainties. XenoPort's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, the uncertain results and timing of clinical trials; XenoPort’s or its partners’ ability to successfully conduct clinical trials in the anticipated timeframes, or at all; the uncertainty of the FDA’s NDA approval process and other regulatory requirements; XenoPort’s dependence on its current and additional collaborative partners; and the uncertain therapeutic and commercial value of XenoPort’s compounds. These and other risk factors are discussed under the heading “Risk Factors” in XenoPort’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2009. XenoPort expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

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XenoPort is a registered trademark of XenoPort, Inc.

Solzira and Requip are trademarks of GSK.

Contact:

XenoPort, Inc. Jackie Cossmon, 408-616-7220 ir@XenoPort.com

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