Napo terminates its collaboration Agreement with Glenmark Pharmaceuticals

Napo Pharmaceuticals, Inc. ('Napo') has terminated its Collaboration Agreement with Glenmark Pharmaceuticals ('Glenmark'), dated July 2, 2005. Pursuant to the Collaboration Agreement, Glenmark was to develop and commercialize the drug crofelemer in over 140 countries. The compound is a treatment for both acute and chronic watery diarrhea, life-threatening ailments that impact millions of people across the world.

Effective December 8, 2011, the termination was based on Glenmark's alleged breaches of the collaboration agreement between the two parties. However, Glenmark has yet to file a single application for regulatory approval with the Drugs Controller General India or any other regulatory agency.

Napo believes Glenmark has materially breached the Collaboration Agreement by failing to fulfill its basic responsibilities to develop, commercialize, file for or gain regulatory approval for crofelemer for use in people living with HIV/AIDS - for which successful phase 3 clinical trial results were announced in 2010 -- or adult acute watery diarrhea, for which there have been several successful clinical trial results.

As per Napo, the company also has also failed to develop the drug for the treatment of pediatric diarrhea. According to the World Health Organization, 1.5 million children die annually from dehydration due to acute diarrhea, with millions more suffering long-term harm. Child mortality and illness due to diarrheal diseases is especially severe in India.

On September 9, 2011, Napo sent Glenmark a notice of default, which gave Glenmark 60 days to remedy its defaults alleged therein. Napo terminated the agreement based on Glenmark's failure to cure these defaults.

Napo focuses on the development and commercialization of proprietary pharmaceuticals for the global marketplace. The company's business model merges traditional high-value markets in the West with the higher volume business models of emerging and developing economies.

Glenmark Pharmaceuticals, a leader among the emerging market companies in drug discovery and development and most of its active substances in the pipeline are first-in-Class. Glenmark’s achievements over the year include a major deal with Sanofi in Crohn's disease, completing Phase II trials of its first novel product, crofelemer and demonstrated higher sales and profit growth.