NAPU Napo Pharm Di

RNS Number:7256S
Napo Pharmaceuticals Inc
21 April 2008


For immediate release                                             21 April 2008



                           Napo Pharmaceuticals, Inc

                           ("Napo" or "the Company")



                          INTERIM MANAGEMENT STATEMENT

South San Francisco; 21 April 2008 - Napo Pharmaceuticals, Inc. (LSE: NAPL and
NAPU) is today issuing its Interim Management Statement ("IMS"). This IMS
relates to the three month period from 1 January 2008 to 31 March 2008 and
contains information up to the publication of this IMS ("the period").



Material Events



CRO-ID Phase 2a Infectious Diarrhoea Trial



Statistically significant Phase 2a trial for CRO-ID (crofelemer for the
treatment of acute adult infectious diarrhoea) conducted by Napo's partner,
Glenmark Pharmaceuticals Limited.  The results were based on an observed case
analysis. Further analysis is ongoing, as per the protocol and ITT analysis will
be published as and when it is available.



CRO-HIV Phase 3 Trial



The CRO-HIV ADVENT trial is a multicenter US trial and enrolment into the trial
is directed towards showing clinical benefit of the drug in the patients who
have consistent significant watery diarrhoea, which is a subset of the larger
number of HIV patients who meet the criteria of having chronic diarrhoea.  The
Company adopted this strict requirement of the study protocol to minimise the
variability in the study results and increase the power of the study.  Since
commencement of enrolment, over 200 patients have presented with chronic
diarrhoea for evaluation for study participation, however, less than 50% have
met the strict criteria for watery diarrhoea for study enrolment. Accordingly,
Napo now anticipates that the Stage I interim results will be available from the
CRO-HIV trial in the second half of this year and that the final results and a
NDA filing will occur in the first half of 2009; this is subject to further
funding.



CRO-ID Phase 2 Cholera Trial



Napo is testing lower doses and different formulations in the continuation of
the cholera trial (See May 21, 2007 press release - "Ethics Committee Approval
Granted for Multiple-Dose Continuation of Phase 2 Clinical Trial of Crofelemer
for Treatment of Secretory Diarrhoea Associated with Cholera Infection"). This
trial is ongoing and Napo anticipates results from the trial in Q2 2008.





CRO-IBS Phase 2b Trial



This trial was conducted by Napo's former licensee - Trine Pharmaceuticals Inc
("Trine").  On 11 February 2008 Napo announced Trine's disclosure to Napo of
Trine's review of preliminary data of the Phase 2b study conducted by Trine for
the treatment of diarrhoea-predominant irritable bowel syndrome ("D-IBS") with
crofelemer ("CRO-IBS"). Napo was informed by Trine that they have determined
that: i) the primary clinical endpoint of pain was not achieved; and ii) that
there were no drug related adverse events.  Napo and Trine have mutually
terminated the license of crofelemer to Trine.  The Company recently received
the data package from the trial and is evaluating the data.



Strengthened intellectual property position



In the US, Napo received a composition of matter patent and a use patent for
"enteric formulations of proanthocyanidin polymer anti-diarrhoeal compositions"
which expire in 2017 and 2018, respectively.   Napo reached agreement with the
University of Iowa Research Foundation to obtain the non exclusive, royalty free
license of United States Patent No. 5,234,922, and titled "Use of Sulfonylureas
and Other Potassium Channel Regulators to Treat Secretory Diarrhoea", and in the
inventions described and claimed therein.

Cash Position

Napo had cash and cash equivalents plus short term investments as at 31 March
2008 of US$5.1 million.  Napo expects that this level of cash and cash
equivalents plus short term investments will last into July 2008.

Financing

In March 2008, Napo entered into note and warrant purchase agreements for the
issuance of convertible promissory notes that bear interest at a rate of 3.2 per
cent for a total of US$2,250,000 ("2008 Notes").  Up to 25 per cent of the
principal amount of the 2008 Notes are convertible into shares of Napo common
stock at a price of 27.9 pence per share.  If the maximum conversion takes
place, the Company would issue 1,016,655 shares of Napo common stock.  The
remaining 75 per cent of the 2008 Notes are repayable in cash on 31 July 2008.
Holders of the 2008 Notes were also issued warrants to purchase 3,049,965 common
shares of Napo common stock exercisable at any time from 31 July 2008 until 3
March 2013 at the conversion price of 27.9 pence per share.

In March 2008, coincident with the 2008 Notes Napo issued 600,000 shares of
common stock to an investor at 25 pence per share.  Approximately 1,084,432
warrants to purchase Napo common stock were issued to a group of trade
contractors exercisable at $0.55 per share.

Outlook

Napo received a "going concern" opinion from its US auditors, BDO Seidman LLP
for the year ended 31 December 2007.  The opinion states that the Company has
suffered recurring losses from operations and has a net capital deficiency that
raise substantial doubt about its ability to continue as a going concern.

Management have plans to raise additional funds, which include: the out-license
of certain rights to crofelemer including the indications of CRO-HIV, CRO-IBS,
CRO-ID and CRO-PED in the United States and other western territories; as well
as certain rights to NP-500, in exchange for a licensing fee(s).  Such licensing
fees may need to be supplemented with debt or equity issuances in order for Napo
to have sufficient funds to complete the CRO-HIV Phase 3 clinical trial. If Napo
is unable to attract such funding through a combination of licensing fees and
equity or debt issuances, it may be forced to curtail sharply its operations
including discontinuing the CRO-HIV trial.



Sir William Young, Chairman of the Board of Napo commented:  "While Napo needs
to bring in funds from corporate partnering and other activities in order to
complete its Phase 3 trial, the board feels the recent stock price drop
dramatically undervalues the company."

Lisa A. Conte CEO of Napo Pharmaceuticals, Inc. commented:

"It is my firm belief that, the fall in the Company's share price places an
unrealistic value on Napo and disregards the recently announced trial results.

The statistically significant results on crofelemer in the treatment of acute
infectious diarrhoea have infused our on-going corporate partner and grant
discussions with the opportunity to represent a potential dual indication
approach to filings for regulatory approvals for crofelemer next year-chronic
diarrhoea in people living with HIV/AIDS and acute infectious diarrhoea.  This
approach may potentially increase the likelihood of regulatory approval for at
least one indication of crofelemer, it may also expand the available patient
populations that might benefit from crofelemer, as well as increasing the target
market size."

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
(44) + 020 7466 5000
Tim Anderson, Mary-Jane Johnson


About Napo Pharmaceuticals, Inc.


Napo Pharmaceuticals, Inc. focuses on the development and commercialisation 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 evaluated in a randomised, double-blind, parallel-group,
placebo-controlled, two-stage, adaptive design study to assess the efficacy and
safety of crofelemer at 125mg, 250 mg, and 500 mg oral doses twice daily ("po
BID") for the treatment of chronic diarrhoea in people living with HIV/AIDS (the
"ADVENT" trial).  The ADVENT trial will be executed in two stages. 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) are being assessed in Stage I.
When approximately 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 both to this dose of crofelemer and the
placebo, providing for 125 patients on placebo and 125 patients the selected
crofelemer dose.



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 an early clinical stage product, NP-
500, for the treatment of insulin resistant diseases of Type 2 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 Napo
has entered two screening relationships 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 Glenmark Pharmaceuticals Limited of India and
AsiaPharm Group Ltd. of China. For more information please visit
www.napopharma.com.



Disclaimer  The Shares referenced in this announcement are not for distribution,
directly or indirectly, in or into the United States or to any US person as
defined in Regulation S under the US Securities Act of 1933, as amended
("Regulation S") except in compliance with the Securities Act of 1933, as
amended (the "Securities Act"). This announcement is not an offer of securities
for sale into the United States or elsewhere. The Shares described above have
not been registered under the Securities Act and may not be offered or sold in
the United States or to, or for the account or benefit of, US persons (as such
term is defined in Regulation S) unless they are registered under the Securities
Act or they are exempt from registration under the Securities Act. No offer or
sale of Regulation S securities has been made or will be made in the United
States.  Hedging transactions involving these securities may not be conducted
unless in compliance with the Securities Act.

This release contains certain statements, statistics and projections that are or
may be forward-looking.  These statements are based on the current expectations
or beliefs of Napo's. management and are subject to a number of factors and
uncertainties (including the "Risk Factors" identified in Napo's Prospectus
issued on 28 September 2007) and the outcome of these events may differ
materially from those described in the forward-looking statements.  The accuracy
and completeness of all such statements, including, without limitation,
statements regarding the future financial position, strategy, projected costs,
plans and objectives for the management of future operations of Napo and its
subsidiaries is not warranted or guaranteed. These statements typically contain
words such as "intends", "expects", "anticipates", "estimates" and words of
similar import. By their nature, forward looking statements involve risk and
uncertainty because they relate to events and depend on circumstances that will
occur in the future. Although Napo believes that the expectations reflected in
such statements are reasonable, no assurance can be given that such expectations
will prove to be correct. There are a number of factors, which may be beyond the
control of Napo, which could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking statements.
Other than as required by applicable law or the applicable rules of any exchange
on which our securities may be listed, Napo has no intention or obligation to
update forward-looking statements contained herein.  You should not place undue
reliance on forward looking statements, which speak only as at the date of this
announcement.






                      This information is provided by RNS
            The company news service from the London Stock Exchange
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