SOUTH SAN FRANCISCO, Calif., Jan. 8 /PRNewswire/ -- Napo Pharmaceuticals, Inc., which focuses on the development and commercialization of proprietary pharmaceuticals for the global marketplace in collaboration with local partners, announces that it has entered into a binding letter of intent for a license of intellectual property and has entered into subscription agreements in connection with a placing of 3,513,741 new common shares with investors (the “Placing Shares”) at 94.5p per share (the “Placing Price”) to raise approximately 3.15 million pounds Sterling (approximately $6.17 million) net of expenses. 94.5p was the closing price of NAPL on Friday, 5 January 2007.
Binding Letter of Intent for License of Intellectual Property
Napo has entered into a binding letter of intent for the license of a use patent and regulatory and other information regarding NP-500, a clinical stage product which Napo has identified and which in pre-clinical animal studies has been shown to benefit symptoms of diabetes and cardiovascular risk factors known as metabolic disease, and to mitigate risk of stroke. NP-500 is a known compound with a novel mechanism of action relative to agents currently approved and in clinical testing. The compound has progressed through multi- dose Phase 1 testing.
The license will allow Napo to have access to the regulatory package filed with the United States Federal Drug Administration, and to access technology protected by a use patent in the United States. The license to the regulatory package provides the data to allow NP-500 to progress into Phase 2 proof of concept testing. Napo hopes to work with a partner to generate related proprietary compounds.
The consideration for the license consists of initial payments of $1,500,000 ($500,000 of which is payable on signature of the Letter of Intent), plus milestone payments and royalties.
Private Placement
The issue of the Placing Shares is expected to take place in two tranches. The first tranche, of 3,026,643 common shares at the Placing Price is proposed to be issued in January 2007. These subscriptions are conditional on the admission of this tranche of Placing Shares to the Official List and to trading on the London Stock Exchange’s market for listed securities (“Admission”) by 30 January 2007.
The second tranche of shares is to be issued pursuant to an agreement by investors to subscribe for 487,098 Placing Shares at the Placing Price. Payment for these shares is expected on or before 31 March 2007. This subscription is conditional upon the Admission of this tranche of Placing Shares by 15 April 2007 or such later date as the Company may agree, and upon certain arrangements being entered into between the Company and these investors.
Upon Admission of the first tranche of the Placing Shares the Company’s issued share capital will increase to 46,319,942 common shares, including 124,271 common shares at the Placing Price that will be issued to the Company’s advisers in connection with the placing. 13,530 warrants are to be issued to an adviser to the Company in connection with the Placing. In connection with the second tranche of Placing Shares, 24,354 common shares at the Placing Price will be issued to the Company’s advisers.
The Placing Shares and the shares to be issued to advisers represent approximately 8.5 per cent of the Company’s current total issued common shares.
Application will be made for 3,150,914 shares (comprising 3,026,643 Placing Shares and 124,271 shares to be issued to the Company’s advisers in connection with the Placing) to be admitted to the Official List and to trading on the London Stock Exchange’s market for listed securities and it is expected that Admission will become effective and dealings will commence at 08.00 a.m. on 12 January 2007.
Use of Placing Proceeds
Proceeds from the financing will be used to progress NP-500 toward Phase 2 studies for the indications of insulin-resistant diseases of Type II diabetes and metabolic syndrome.
Napo also intends to expand the Company’s operations including the testing, subject to FDA approval, of a lower dose of crofelemer in the final Phase 3 clinical trial of crofelemer for HIV/AIDS related diarrhea (CRO-HIV) prior to commercialization. Based on recent data, the Company feels lower dose investigation could potentially benefit the commercial development of all crofelemer clinical indications. Finally, Napo will also evaluate the opportunity for EU approval for CRO-HIV.CRO-HIV has fast-track designation from the FDA.
Commenting on this announcement, Lisa A. Conte, Napo’s Chief Executive Officer, said: “This financing demonstrates continued investor interest in the Napo business plan. Based on recent data and to optimize the commercial value of crofelemer upon launch, it is important that the Company have the financial resources to potentially test lower doses of crofelemer in our upcoming Phase 3 trial for HIV/AIDS related diarrhea. Pricing and reimbursement will be based on tested doses. We are also pleased with the diversification to an additional clinical stage product the NP-500 program allows. Diabetes and insulin-resistance syndromes are epidemic throughout the world, afflicting up to 30 per cent of the population. Napo is looking forward to progressing NP- 500 through the clinic to commercialization in conjunction with global partnerships.”
Dr. Gerald Reaven, Professor Emeritus at Stanford and a leading expert on insulin-resistant diseases, and Medical Advisor to Napo’s Board of Directors, commented: “The therapeutic benefits of NP-500 observed in relevant pre- clinical models of type 2 diabetes, dyslipidemia, and essential hypertension raises the possibility that this compound may address the clustering of metabolic abnormalities present in these diverse clinical syndromes that distinguishes it from any of the pharmacological approaches that are now available. This benefit gives this compound an advantage, compared to the currently approved products, which affect only one of these disease targets.”
For more information please contact: Napo Pharmaceuticals, Inc Lisa Conte, Chief Executive Officer (001) + 650 616 1902 Charles Thompson, Chief Financial Officer (001) + 650 616 1903 Buchanan Communications 020 7466 5000 Tim Anderson, Mary-Jane Johnson Nomura Code Securities Limited 020 7776 1204 Juliet Thompson About Napo
Napo Pharmaceuticals Inc. focuses on the development and commercialization of proprietary pharmaceuticals for the global marketplace in collaboration with local partners. Napo was founded in November 2001, and is based in California, USA with a subsidiary in Mumbai, India.
Napo’s late-stage proprietary gastro-intestinal compound, crofelemer, is in various stages of clinical development for four distinct product indications, including a late-stage Phase 3 program:
* CRO-HIV for AIDS diarrhea, Phase 3 * CRO-IBS for diarrhea irritable bowel syndrome (“D-IBS”), Phase 2 * CRO-ID for acute infectious diarrhea (including cholera), Phase 2 * CRO-PED for pediatric diarrhea, Phase 1
The FDA has granted fast-track status to CRO-IBS and CRO-HIV. Crofelemer, a proprietary patented agent, is extracted from Croton lechleri, a medicinal plant which can be sustainably harvested from several countries in South America. Napo also plans to develop a pre-clinical product, NP-500, for the treatment of insulin resistant diseases of Type II diabetes and Syndrome X. Napo also has a plant library of approximately 2,300 medicinal plants from tropical regions and Napo has entered its first screening relationship associated with this collection. Currently, products are based on the chemical and biological diversity derived from plants with medicinal properties, but future products may be in-licensed from other sources.
Napo has partnerships with Trine Pharmaceuticals, Inc. of the United States of America; Glenmark Pharmaceuticals Limited of India; and AsiaPharm Group Ltd. of China. For more information please visit www.napopharma.com
Napo Pharmaceuticals, Inc.
CONTACT: Napo Pharmaceuticals, Inc: Lisa Conte, Chief Executive Officer,+001-650-616-1902l or Charles Thompson, Chief Financial Officer+001-650-616-1903; or Buchanan Communications: +020-7466-5000, TimAnderson, or Mary-Jane Johnson; or Nomura Code Securities Limited,+020-7776-1204, Juliet Thompson
Web site: http://www.napopharma.com/
