Fundraising

    RNS Number : 9604F
  Napo Pharmaceuticals Inc
  15 October 2008
   

 For immediate release  15 October 2008



    Napo Pharmaceuticals, Inc
    ("Napo" or "the Company")

    Fundraising
    
South San Francisco, California, 15 October, 2008 - Napo Pharmaceuticals, Inc., (LSE: NAPL and NAPU), is pleased to announce that, as part
of its ongoing fundraising activities, the Company has raised approximately US$1,000,000 (approximately GBP 574,152) (the "Fundraising")
through the issue of convertible debt (the "Notes"). 

The Notes are repayable on 20 June 2009 and bear interest at 8% per annum, payable in cash or the Company's common shares of US$0.0001 each
("Common Shares"). In most circumstances, the Notes are convertible after 90 days following 30 September 2008 at the option of the holders
into Common Shares, at US$0.194163 per Common Share. This is the same conversion price as the convertible notes issued in June 2008 (see
announcement dated 23 June 2008). No warrants will be issued as part of the Fundraising.

The maximum number of Common Shares that may be issued under a conversion at the Conversion Price is 5,150,311 Common Shares (the
"Conversion Shares"), representing approximately 9.5 per cent of the issued share capital of the Company. The Company's issued shares equal
54,206,383 Common Shares.

Any issue of Conversion Shares pursuant to conversion of the Notes is currently subject to the approval by the Company's shareholders.
However with effect from 8 a.m. (London time) on 16 October, 2008, the listing of the Company's shares on the Main Market of the London
Stock Exchange plc will be cancelled and the Company will no longer be required to obtain approval from the Company's shareholders for the
issue of the Conversion Shares. The issue of the Notes is not conditional on shareholder approval.

The net proceeds of the Fundraising (the "Net Funds") are not sufficient to complete the Phase 3 adaptive design trial for CRO-HIV. The
Company expects that the Net Funds to provide the Company with funds into November 2008. The Net Funds, together with existing resources and
other funds which the Directors hope to raise through 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, in exchange for a licensing fee(s), will be used primarily
for working capital purposes and to continue to finance the costs of the CRO-HIV Phase 3 US trial. Such licensing fees may need to be
supplemented with further debt or equity issuances in order for Napo to have sufficient funds to complete the CRO-HIV Phase 3 clinical
trial. 

Lisa Conte, Napo's CEO, commented: "We are very grateful for this show of support from our shareholders."
    
For more information please contact: 

Napo Pharmaceuticals, Inc. 
Lisa Conte, Chief Executive Officer 
+001 [phone] 

Charles Thompson, Chief Financial Officer
+001 [phone] 

Buchanan Communications
+ 44 (0)20 7466 5000
Tim Anderson, Mary-Jane Johnson, Catherine Breen 

    
About Napo Pharmaceuticals, Inc. 

Napo Pharmaceuticals, Inc. focuses on the development and commericalization 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 diarrhea, Phase 3 
    * 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 first in class agent, is extracted from Croton lechleri, a medicinal plant which can be sustainably
harvested from several countries in South America. Napo has exclusive worldwide rights to synthetic compounds in pre-clinical development
which act by the same mechanism of action. Napo also plans to develop an early clinical stage product, NP-500, for the treatment of insulin
resistant diseases of Type II diabetes and metabolic syndrome (Syndrome X; pre-diabetic syndrome) and has 4 issued patents for anti-cancer
agents in pre-clinical development. Napo 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. 
    For more information please visit www.napopharma.com. 

This announcement contains forward-looking statements relating to Napo Pharmaceuticals and its products that involve risks and
uncertainties, including statements regarding future products and developments that are not historical facts. Such statements are only
predictions and the company's actual results may differ materially from those anticipated in these forward-looking statements. These
statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should,'' "could,"
"project," "plan,'' "seek," "intend,'' or "anticipate'' or the negative thereof or comparable terminology and statements about industry
trends and Napo's future performance, operations and products. 


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