Neurobiological Technologies sells Xerecept to Celtic Pharma for up to $48 million

By Jennifer Chiou

New York, Sept. 20 - Neurobiological Technologies, Inc. announced it agreed to sell the rights to Xerecept to a subsidiary of Celtic Pharma Holdings LP for up to $48 million.

Xerecept, which is in Phase III clinical trials, is a synthetic preparation of the natural human peptide coritcotropin-releasing factor for the treatment of swelling associated with brain tumors.

Under the agreement, Neurobiological Technologies will initially receive $33 million and up to an additional $15 million based on milestones. Neurobiological Technologies is also eligible to receive profit-sharing payments on sales of Xerecept in the United States, conditioned on regulatory approval, and royalties on other sales.

The Celtic Pharma subsidiary will assume responsibility for product development and pay related expenses upon closing while Neurobiological Technologies will continue backing its current clinical trials.

"If the ongoing trials are successful, brain cancer patients around the world will have access to a useful product in reducing the debilitating swelling around their tumors," president and chief executive officer Paul E. Freiman said in a news release.

"Celtic provides both an attractive financial vehicle and an experienced pharmaceutical management team to realize the global potential of Xerecept.

"From a financial standpoint, I expect that the upfront payments will offset the costs of our complete Viprinex Phase III clinical program for ischemic stroke," Freiman added.

Neurobiological Technologies is a Richmond, Calif., company that develops neuroprotective and neuromodulatory agents for nervous system disorders.

Celtic Pharmaceutical Holdings is a global private equity firm focused on the biotechnology and pharmaceutical industries.

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