Napo Pharmaceuticals Receives Cornerstone Investment for Crofelemer Access Program

Crofelemer, Once Approved for Children, Could Aid in Treating Diarrhoel Diseases That Kill An Estimated 2.5 million Children Each Year

SOUTH SAN FRANCISCO, Calif.--()--Napo Pharmaceuticals, Inc., (“Napo”) of South San Francisco, California, whose novel anti-diarrheal compound crofelemer is currently in late-stage clinical development has received an initial cornerstone investment in a wholly owned subsidiary, Crofelemer Access Program (“CAP”) Global LLC, from Asset Management Company, a pioneer healthcare venture capital firm in Palo Alto, California, through its founder Pitch Johnson. Investors in CAP Global will receive royalties from the sale of crofelemer (pending successful registration of crofelemer as an FDA approved product) in western territories (North America, EU countries and Japan) and the opportunity to convert their interest in CAP Global to Napo common stock.

The CAP was created to fund the acceleration of development of crofelemer for pediatric populations (CRO-PED) and provide access to the product in disaster situations and resource-constrained geographies, pending successful registration of crofelemer as an FDA approved product (and any local registration requirements). The commitment is being made in conjunction with a Clinton Global Initiative global health commitment. As part of the CAP, Napo and Direct Relief International (“DRI”) have formed an alliance whereby Napo will provide CRO-PED at cost for distribution through DRI’s network.

Crofelemer is currently in final Phase 3 clinical development for chronic diarrhea in people living with HIV/AIDS in adults in the US (CRO-HIV), and has been tested for safety in children as young as three months of age. Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) acquired certain rights to crofelemer from Napo in December 2008. Crofelemer currently is being investigated in a Phase 3 study as an anti–secretory anti–diarrheal agent for CRO-HIV, for which an NDA submission is planned during the first half of 2010. Salix now has an exclusive license to this indication and the additional indications of pediatric diarrhea and acute infectious diarrhea in North America, Europe (excluding Iceland, Liechtenstein, Norway and Switzerland) and Japan. Salix also has a worldwide license to all other possible human indications, including irritable bowel syndrome, for crofelemer. Salix believes the HIV-associated diarrhea market opportunity alone may be $300 million.

Glenmark Pharmaceuticals Limited has licensed crofelemer for the indications of CRO-HIV, pediatric diarrhea (CRO-PED) and infectious diarrhea (CRO-ID) in 140 countries outside North America, EU and Japan (“ROW”). Glenmark anticipates that with Salix’s planned submission of a NDA for CRO-HIV in the first half of 2010, it will make regulatory submissions in its territories and obtain regulatory approvals starting in 2010. Glenmark expects the peak sales opportunity in its territories to be $80 million for CRO-HIV, in addition to CRO-ID sales in ROW. Glenmark and Salix have also entered into a commercial supply agreement for crofelemer API.

In the approximately 1700 patients tested to date, the medication has been very well-tolerated. In addition to HIV-related diarrhea, crofelemer has demonstrated efficacy in patients with severe cholera at the ICDDR,B in Bangladesh; severe acute infectious diarrhea in India; Traveler’s diarrhea in Mexico and Jamaica; and diarrhea-predominant irritable bowel syndrome (D-IBS) in Phase 2 studies.

Napo has exclusive worldwide rights to proprietary synthetic compounds in pre-clinical development which act by a similar mechanism of action.

Pitch Johnson commented, “We are a very pleased to be able to provide the cornerstone investment in CAP, which allows for financial participation in both traditional equity appreciation in Napo and the highly valuable western markets, while simultaneously addressing serious unmet global health concerns. Crofelemer’s novel and first in class mechanism is ideally suited for these dual goals.”

Lisa Conte, the CEO of Napo, commented, “Approximately 2.5 million children under the age of 5 die each year from the dehydration and the devastation associated with severe diarrhea, as recently witnessed in the cholera epidemic in Zimbabwe. Napo is committed to continuing to build a sustainable business model providing superior return on investment consistent with the risk/reward model of the emerging pharmaceutical industry, and simultaneously addressing the global health challenges facing growing populations who lack access to clean, safe water.”

About Napo Pharmaceuticals, Inc.

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 diarrhoea, Phase 3
  • CRO-IBS for diarrhoea irritable bowel syndrome ("D-IBS"), Phase 2
  • CRO-ID for acute infectious diarrhoea (including cholera), Phase 2
  • CRO-PED for paediatric diarrhoea, Phase 1

The FDA has granted fast-track status to CRO-IBS and CRO-HIV. CRO-HIV is being investigated under a Special Protocol Assessment (“SPA”) agreement with the FDA.

Napo has partnerships with Salix Pharmaceuticals, Inc., Glenmark Pharmaceuticals Limited of India and AsiaPharm Group Ltd. of China. The Company has also established an alliance with Direct Relief International to provide access to and distribution of crofelemer for pediatric populations in disaster and resource-constrained geographies, if the product achieves approval and registration by the FDA. For more information please visit www.napopharma.com.

About CAP

CAP Global became a B Corp to allow Napo to fully embrace its policies and culture and to communicate to shareholders, collaborators, and all stakeholders, in a legal manner in considering various strategic business opportunities.

CAP Global’s mission is to accelerate the development of crofelemer for pediatric populations in the treatment of multiple diarrheal diseases (such as cholera), and to provide crofelemer cost-effectively to relief organizations.

Crofelemer is a novel pharmaceutical agent derived from raw plant material, which the CAP Global sustainably harvests from rain forest areas in South America. A further mission of the CAP Global is to employ fair trade work practices in the local businesses established to supply the plant material. The agroforestry will provide income to more than 5000 individuals upon the approval of crofelemer across the range of its intended indications, helping to conserve valuable forest land. There is also a long-standing commitment to provide benefit sharing to rain forest populations in recognition of the intellectual contribution to the knowledge of how medicinal plants have been utilized safely for thousands of years.

Contacts

Napo Pharmaceuticals, Inc.
Lisa A. Conte, 415-516-2732
lconte@napopharma.com

Contacts

Napo Pharmaceuticals, Inc.
Lisa A. Conte, 415-516-2732
lconte@napopharma.com