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Napo Obtains IRB Approval for Phase 3 Clinical Trial Protocol for Crofelemer in HIV/AIDS Diarrhea Assessment

South San Francisco, California, March 14, 2007 - Napo Pharmaceuticals, Inc. (LSE: NAPL) announces today that it has received approval from the principal independent review board "IRB" overseeing the pivotal, phase 3 ADVENT study of crofelemer for diarrhoea in people living with HIV/AIDS.

The ADVENT trial (Anti-Diarrhea therapy in HIV disease-Emerging treatmeNT concepts) is a randomized, double-blind, parallel-group, placebo-controlled, two-stage, adaptive design study to assess the efficacy and safety of crofelemer 125mg, 250 mg, and 500 mg oral doses twice daily for the treatment of HIV-Associated Diarrhea. Napo previously met with the United States Food and Drug Administration (FDA) on January 16, 2007 under the Special Protocol Assessment Process on this adaptive design of its ADVENT trial. The study will be carried out under an FDA Fast Track designation.

About the ADVENT Trial The 'adaptive design' trial is executed in two stages. Adaptive trial design has been advocated by the FDA to improve efficiency of clinical trials*. Stage I represents a dose selection stage and Stage II a dose assessment stage. Four dose groups (placebo, 125 mg, 250 mg, and 500 mg p.o. b.i.d.) will be assessed in Stage I. When 50 subjects per group complete the initial efficacy dosing period (28 days), an interim analysis will be conducted to select an optimal single dose of crofelemer for Stage II. Stage II will continue until an additional 75 subjects are randomised to this dose of crofelemer or placebo, providing for 125 patients on placebo and 125 patients the selected crofelemer dose. The primary study analysis is planned after all subjects complete the 28-day efficacy period. A full study analysis and final study report will be prepared at that time that will form the basis of a subsequent New Drug Application (NDA) filing to FDA. Subjects who complete the efficacy part of the study will be allowed to continue into a 5 month extension. The purpose of the extension is to provide additional safety and tolerability information about crofelemer in longer tem use.

"The IRB approval of our protocol with the adaptive design is a very important milestone for Napo", said Lisa A. Conte, Chief Executive Officer of Napo. "This represents the ability to proceed efficiently in our Phase 3 study, while gaining the commercial benefits of testing lower doses in the final study prior to filing our NDA for the AIDS diarrhoea indication. While these efforts have prolonged the initiation of dosing in the trial, Napo is still aiming for an NDA for this indication in the next year, and targeting approval under fast-track designation by mid-2008."

Special Protocol Assessment

The FDA's SPA process was implemented under the Prescription Drug User Fee Act (PDUFA) in November 1997. The FDA agreed to specific performance goals for special protocol assessment and agreement that apply to pivotal efficacy trials. To use this process, companies planning clinical trials designed to support efficacy claims submit a study protocol, as well as related questions. Upon review, the FDA may then agree to the protocol design, execution and analyses and issue a special protocol letter to that effect. Once the FDA agrees in writing to a protocol reviewed under this process, the assessment should be considered binding on the review division of the FDA as long as the protocol is followed, unless substantial scientific issues essential to determining the safety or efficacy of the drug are being identified after the testing has begun.

References

*Scott Gottlieb, MD, 2006 Conference on Adaptive Trial Design, July 10, 2006, http://www.fda.gov/oc/speeches/2006/trialdesign0710.html.

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 1205
Clare Terlouw

About Napo Pharmaceuticals, Inc.

Napo Pharmaceuticals, Inc. is focused on developing and commercializing proprietary pharmaceuticals for the global marketplace, in collaboration with local partners, in order to address major global unmet medical needs in developed and developing countries. Napo is currently developing crofelemer, which is in various stages of clinical development for four distinct product indications, including one product in Phase III, two in Phase II and one in Phase I clinical trials. Napo's four indications include AIDS diarrhea, Irritable Bowel Syndrome (IBS), acute infectious diarrhea (traveler's diarrhea and cholera) and pediatric diarrhea. The Company has been granted FDA fast-track status for the AIDS and IBS products and has generated extensive safety data on more than 1500 patients across all indications. Napo's partners include Trine Pharmaceuticals Inc., Glenmark Pharmaceuticals of Mumbai, India and the AsiaPharm Group Ltd., headquartered in Singapore and Shanghai. Napo's clinical stage product for diabetes and metabolic syndrome, NP-500 is a candidate for Phase 2 clinical development. Napo also has a medicinal product library of over 2,300 plants, which is the subject of pre-clinical discovery collaboration.