Delisting Circular

    RNS Number : 8760C
  Napo Pharmaceuticals Inc
  05 September 2008
   
The Delisting Circular announcement for Napo Pharmaceuticals Inc released on 5 September 2008 at 15:41 under RNS No 8756C has been
re-released to facilitate onward
transmission by third party vendors.
 
The announcement is unchanged and is reproduced in full below.



 For immediate release  5 September 2008
    

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


    Proposed delisting and cancellation of the Company's Listing and posting of a Circular and Notice of Special Meeting of Shareholders

    South San Francisco, California, 5 September 2008 Napo Pharmaceuticals, Inc., (LSE: NAPL and NAPU) announces that a circular is being
sent to shareholders today setting out details of the proposed delisting and cancellation of the Company's Common Shares from the Official
List together with other shareholder proposals including adoption of new Bylaws to eliminate pre-emptive rights, authorization of an
increase in the share capital and authorizing the Board to declare a reverse stock split (all of which are conditional up the delisting
taking effect). The circular contains a notice of a Special Meeting of Shareholders to be held on 17 September 2008 (the "Special
Shareholders' Meeting).
    The resolutions to cancel Napo's listing and amend the Bylaws to eliminate the pre-emption rights require a 75% affirmative vote of
those Common Shares voting at the meeting. The other resolutions require only a simple majority of the quorum. Additionally, 50% of
outstanding shares must vote in order to constitute a quorum.
    The Directors of the Company have undertaken and certain of its shareholders have granted proxies to vote in favour of the resolutions
to be proposed at the Special Shareholders' Meeting, in respect of all Common Shares that they beneficially hold as at 5 September (the
Record Date) amounting in aggregate to 25,807,762 Common Shares, representing approximately 47.6 % of the issued and outstanding Common
Stock of the Company.

    As previously announced, the Company has been in negotiations with potential corporate partners in recent months to address the
commercialization of crofelemer. Until recently, the Company had been negotiating term sheets with three separate potential partners but the
Company now intends to move forward with one of these partners. Consequently on 26 August 2008, the Company signed a non-legally binding
term sheet (the "Term Sheet") with a pharmaceutical company for the commercialization in North America and Mexico of crofelemer for the
indication of chronic diarrhoea in persons living with HIV/AIDS ("CRO-HIV"). The Term Sheet also relates to the potential commercialization
of crofelemer for adult acute infectious diarrhoea ("CRO-ID"), crofelemer for pediatric diarrhoea ("CRO-PED") and crofelemer for diarrhoea
predominant irritable bowel syndrome ("CRO-IBS").  

    Under the Term Sheet it is envisaged that upon the signature of a definitive licensing agreement, which is expected to occur in October
2008, the Partner will provide up-front funds to the Company and the Partner will subscribe for a strategic equity interest in Napo. The
Directors believe that the likely level of the proposed up-front payment will not be sufficient to provide sufficient capital to complete
the CRO-HIV trial. The Company therefore plans to raise additional funds through a combination of debt, equity and additional licensing
agreements to complete the funding for the CRO-HIV trial. The Company has received indications of interest in providing additional funds
from investors which are conditional upon, inter alia, the Cancellation and the entry into definitive agreements with the Partner.

    The Company only has sufficient funds to finance the Company's working capital requirements into September 2008.  If the Company is
unable to secure additional finance, the Directors would have to consider terminating or suspending some or all of its drugs trials from
early October 2008.  The Directors are actively negotiating with creditors to reduce and/or delay the sums owed to the Company's creditors.
If no additional funds are raised and no license/partnership agreement is signed by the Company, then the Company may have to cease trading
in October 2008. If the Company is unsuccessful in reducing or delaying payments to its creditors, the Company may have to cease trading
prior to October 2008.  If the Company is successful in raising additional short term financing, such eventuality may be delayed.  

    Nomura Code Securities Limited has resigned as the Company's broker, financial adviser and sponsor.
    A copy of the circular is available for inspection at the UK Listing Authority's Document Viewing Facility at 25 The North Colonnade,
Canary Wharf, London E14 5HS. Copies of the circular and documents for inspection including the proposed new Bylaws will be available for
inspection at Reed Smith Richards Butler LLP, Minerva House, 5 Montague Close, London, SE1 9BB, United Kingdom and the registered office of
Napo Pharmaceuticals, Inc., 250 East Grand Avenue, Suite 90, South San Francisco, CA 94080, United States of America, during normal business
hours on any weekday until the conclusion of the Special Meeting of Shareholders. A copy of the circular will also be available on the
Company's website 
    

    Sir William N. Young, Non-executive chairman commented: "Over the past year, the Directors have been seeking efficient and cost
effective ways to raise further capital to allow the Company to continue the development of its various projects. The Company has had
difficulty raising sufficient equity at an acceptable cost and the Directors consider that the low market capitalization of the Company and
the low liquidity of trading in the Common Shares has made an investment in the Company unattractive to certain investors. Further, after
careful consideration, the Board has come to the conclusion that the regulatory and financial requirements of a listing on the Official List
are too onerous for the Company and the Company's time and money are better spent in concentrating on progressing its clinical trials.
    Consequently, the Board is of the opinion that this next stage of the Company's development is better managed as an unlisted company. On
this basis, the Directors consider that it would be in the best interests of the Company to seek cancellation of the Company's Common Shares
from the Official List."

    

    Lisa A. Conte, CEO of Napo Pharmaceuticals, Inc. commented: "Our listing on the London Stock Exchange has afforded us many benefits.
However, at this time, given the costs of compliance along with the cost of raising capital on the exchange, we believe it is in our
shareholders best interest to cancel our listing at this time and become a private company." 
    For more information please contact: 
    

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

    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. 
    Napo has partnerships with Glenmark Pharmaceuticals Limited of India and AsiaPharm Group Ltd. of China. For more information please
visit www.napopharma.com. 

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