Celtic Pharma has completed the acquisition of exclusive worldwide rights to Xerecept, a Phase III clinical compound, from Neurobiological Technologies Inc (NTI) to treat peritumoral brain edema.

The closing of the transaction, which was originally announced on September 20, 2005, follows the receipt of certain third-party consents and the satisfaction of other closing conditions. At closing, NTI received $20 million and will receive an additional $13 million, payable in instalments through January 2007. Celtic Pharma and NTI will collaborate on the ongoing clinical development of Xerecept in the United States, claims a company release.

"The Celtic Pharma team is delighted to close its first US transaction. The collegial teamwork between NTI and Celtic Pharma allowed us to expeditiously resolve the few outstanding issues," stated Stephen Evans-Freke, a managing principal of Celtic Pharma. "We look forward to working with the NTI team to bring this exciting product through its final stages of clinical and regulatory development in the US, Europe and Japan."

Paul E. Freiman, president and CEO of NTI, added, "We are pleased to be able to move forward collaboratively with Celtic Pharma. The collaboration of our companies should provide for a broader programme ensuring that the proper clinical trials are run globally and if we have positive results we can obtain approval in major markets worldwide. These funds are non-dilutive to NTI shareholders and we expect that they will provide sufficient operational funding for the next twelve to eighteen months.”

The release states that Xerecept works to reduce edema, defined as an abnormal increase in brain water content, which can have dire consequences, potentially leading to brain ischemia (stroke), herniation, and death. Based on clinical data, Xerecept is believed to be a comparably efficacious and safer alternative to the corticosteroids currently being employed in the treatment of cerebral edema.

Various Phase I/II trials demonstrated Xerecept to be safe and with mild side-effects. Xerecept is now in Phase III clinical trials.

NTI is a drug development company focused on the clinical evaluation and regulatory approval of neuroscience drugs.

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