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Napo Pharmaceuticals Initiates Preclinical Development of a Novel CFTR Inhibitor Using Preclinical Resources Offered by the National Institute of Allergy and Infectious Diseases (NIAID)

South San Francisco, California, May 5, 2009 - Napo Pharmaceuticals, Inc. which focuses on the development and commercialization of proprietary pharmaceuticals for the treatment of diarrheal diseases for the global marketplace in collaboration with local partners, is pleased to announce that pre-clinical drug development work is beginning at Menlo Park, California based Stanford Research International, (SRI), on its novel and proprietary second generation CFTR (cystic fibrosis transmembrane conductance regulator) inhibitors for the treatment of secretory diarrhea. These activities are being done using pre-clinical resources offered by the Division of Microbiology and Infectious Diseases (DMID) of the National Institute of Allergy and Infectious Diseases (NIAID), a part of the National Institutes of Health (NIH). The activities conducted by SRI are focused on providing key data towards supporting the filing of an Investigational New Drug (IND) application for the novel CFTR inhibitor.

Napo has the exclusive rights to novel classes of synthetic, small molecule CFTR inhibitors, first discovered at the University of California at San Francisco. These novel CFTR inhibitors have a mechanism of action similar to that of crofelemer, which Napo and its partners are developing for various secretory diarrheas including diarrhea associated with HIV/AIDS in the US and acute infectious diarrhea in India, and severe cholera infection. Napo intends to leverage its CFTR inhibitor knowledge to advance novel drugs for the treatment of secretory diarrhea and gastrointestinal disorders, to provide much needed drugs and multiple therapeutic options for treatment of secretory diarrhea resulting from multiple causes.

Lisa A. Conte, CEO of Napo Pharmaceuticals, Inc. commented: "We are so pleased that Napo will be able to utilize NIAID's preclinical resources towards advancing one of our second generation CFTR inhibitors to clinical development. This will be a welcomed addition to the therapeutic arsenal Napo is developing for the treatment of devastating gastro-intestinal disorders. Napo's first in class anti-secretory/CFTR inhibitor agent, crofelemer, is expected to be on the market in 2010. Napo has adopted a business model to provide global access- all populations and all countries- through its commercial licenses with Glenmark, Salix, and AsiaPharm, and alliances with Relief Organizations such as Direct Relief International."

For more information please contact:

Napo Pharmaceuticals, Inc.
Lisa Conte, Chief Executive Officer
(001) + 650 616 1902

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 HIV-related diarrhea, Phase 3 (under a Special Protocol Assessment)
- 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. Crofelemer is a first-in-class anti-secretory agent. Napo holds the exclusive worldwide rights to novel small molecule potential second generation anti- secretory agents, which have been licensed by Napo from the University of California regents. Napo is developing an early clinical stage/ready for Phase 2 product, NP- 500, for the treatment of insulin resistant diseases of Type II diabetes and metabolic syndrome (Syndrome X; pre- diabetic syndrome). Napo also has a plant library of approximately 2,300 medicinal plants from tropical regions, and the company has entered two screening relationship associated with this collection.

For more information please visit www.napopharma.com.

About CFTR

The cystic fibrosis transmembrane conductance regulator (CFTR) is a cAMP- activated chloride ion (Cl- ) channel expressed in various epithelial cells, and is a pharmacological target for both activators and inhibitors. Activators are useful for the pharmacotherapy of cystic fibrosis, specifically for those mutations that affect CFTR protein by reducing its ability to stay in the open state. Conversely, inhibitors are potentially useful to treat secretory diarrhea caused by enterotoxins, as the CFTR is the main route for Cl- flux in the intestine and polycystic kidney disease. Recently, a variety of potent modulators of the CFTR Cl- channel activity have been identified by high- throughput screening of a large collections of small molecules. The identification of CFTR activators and inhibitors with novel chemical scaffolds might help with the rational design of compounds with improved pharmacological properties.