Company also made a $0.5 million investment for rights in multiple indications and regions.

Salix Pharmaceuticals is paying Napo Pharmaceuticals $4.5 million in cash upfront for rights to crofelemer for all indications in North America, Europe (excluding certain smaller countries), and Japan. The deal also includes a license to the drug for certain indications worldwide. Salix will also make a $0.5 million equity investment through the purchase of 250,000 shares.

Crofelemer is Napo’s antisecretory, gastrointestinal agent currently in a final Phase III trial for the treatment of chronic diarrhea in HIV/AIDS patients. It is also in development for three additional indications: adult acute infectious diarrhea including cholera, which is in Phase II; irritable bowel syndrome also in Phase II; and pediatric diarrhea in Phase I.

Salix will fund the ongoing Phase III study, with some of the costs being off-set against future milestone payments to Napo. The terms of the deal calls for regulatory and sales success-based fees and tiered royalty rates ascending to a $400 million annual sales threshold.

Glenmark Pharmaceuticals  holds the license to crofelemer in 140 emerging and developing countries for diarrhea indications. AsiaPharm has rights in greater China for diarrhea indications. In conjunction with this license to Salix, Glenmark and Salix have entered into a commercial supply agreement for crofelemer API.

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