Celtic Pharmaceutical Holdings L.P. has acquired from Neurobiological Technologies, Inc. worldwide rights to Xerecept, a Phase III clinical compound for the treatment for Peritumoral Brain Edema, the swelling associated with brain tumours.

Xerecept is a synthetic preparation of the natural human peptide, Corticotropin-Releasing Factor (hCRF) that is currently enrolling patients in three Phase III studies in patients with primary brain tumours. Xerecept has received orphan drug designation for peritumoral edema from the Food and Drug Administration (FDA), which confers seven years' market exclusivity upon product regulatory approval, in addition to the product's strong patent protection.

Under the terms of the agreement, NTI will receive $20 million upon closing and an additional $13 million in subsequent non-contingent payments, as well as up to an additional $15 million in milestone payments upon the achievement of certain regulatory objectives. NTI is also eligible to receive profit-sharing payments on sales of Xerecept in the United States and royalties on sales elsewhere in the world. A subsidiary of Celtic Pharma will assume responsibility for developing Xerecept globally and pay all product development expenses.

Stephen Evans-Freke, a Managing Principal of Celtic Pharma, comments, "We believe Xerecept represents a real opportunity to alter the Peritumoral Brain Edema treatment paradigm. In the United States alone, approximately 35,000 patients are diagnosed each year with primary brain tumours, with another 150,000 patients with metastatic brain tumours who could potentially benefit from this product, representing a major need for safe and effective therapies. Importantly, there are no directly competitive therapies in the market or in development today, which makes the XERECEPT orphan drug status designation so valuable. Synthetic corticosteroids are the only option available to clinicians today, but their dangerous side effect profile creates a major need for better therapeutic alternatives."

Clinical data suggest that Xerecept could be as efficacious as high-dose synthetic corticosteroids, specifically dexamethasone, the current standard of care for edema.