SOURCE: Celtic Pharma

September 20, 2005 07:00 ET

Celtic Pharma Acquires Worldwide Rights

Hamilton, Bermuda -- (MARKET WIRE) -- September 20, 2005 --

FOR IMMEDIATE RELEASE

    CELTIC PHARMA ACQUIRES EXCLUSIVE WORLDWIDE RIGHTS TO PHASE III 
             COMPOUND FROM NEUROBIOLOGICAL TECHNOLOGIES

         Celtic Pharma to develop Xerecept(R), a therapy for 
         Peritumoral Brain Edema, in all major global markets

Hamilton, Bermuda and Emeryville, CA, September 20, 2005 -- Celtic Pharmaceutical Holdings L.P. ("Celtic Pharma") today announced that it has acquired from Neurobiological Technologies, Inc. (Nasdaq: NTII) ("NTI") worldwide rights to XERECEPT, a Phase III clinical compound for the treatment for Peritumoral Brain Edema, the swelling associated with brain tumors. This transaction supports Celtic's mandate to build a robust portfolio of late-stage compounds, while providing NTI with the cash and flexibility to fund its upcoming Phase III trial of Viprinex®, its product for the treatment of ischemic stroke. 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 tumors. 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.

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 tumors, with another 150,000 patients with metastatic brain tumors 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."

"We believe that this is an exciting opportunity for our shareholders to realize the value from a product candidate on which we have worked diligently to bring to this stage of clinical development. If the ongoing trials are successful, brain cancer patients around the world will have access to an important step forward in the reduction of the debilitating swelling around their tumors. NTI stockholders will have the opportunity to participate in the future revenues from this compound and the company as a whole will be in a stronger financial position to support its programmes whilst at the same time reducing its burn rate" comments NTI's CEO Paul Freiman.

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

Clinical data suggest that XERECEPT could be as efficacious as high-dose synthetic corticosteroids, specifically dexamethasone, the current standard of care for edema. The clear safety and efficacy profile of XERECEPT should enable physicians to treat patients for their life-threatening edema without fear of the severe side effects seen with dexamethasone and other corticosteroids.

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.

John Mayo, a Managing Principal of Celtic Pharma, adds "NTI has already invested $24 million in this development program and we look forward to bringing this important drug to market. Celtic intends to develop XERECEPT globally and will be initiating trials in Europe. In addition, we have recently announced a strategic alliance with CMIC, Japan's leading CRO, and this exciting product represents a major opportunity for this alliance in Asia. This represents the fourth important late-stage product to be aquired by Celtic Pharma in 2005."

The transaction is expected to close by September 30, 2005.

About XERECEPT®

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 to date, XERECEPT is believed to be a comparably efficacious and safer alternative to the corticosteroids currently being employed in the treatment of cerebral edema. The myriad of adverse effects from corticosteroid therapy are well known and include hyperglycemia, gastritis, gastrointestinal bleeding, weight gain and moon faces, osteoporosis with chronic therapy, psychosis or euphoria, immunosuppression causing increased susceptibility to infection, and skin fragility and striae. In addition, steroid myopathy can occur, causing weakness primarily to proximal muscles of the upper and lower extremities and neck, which is frequently confused with progressive neurological disease. Patients experience weight gain and a "moon face", require emotional support and counseling in dietary modifications. Musculoskeletal effects can be potentially disabling. Infection control measures include avoidance exposure to cold- and flu like symptoms in others. Thromboembolic risk may also increase in a patient population already at high risk for venous thrombosis.

Various phase I/II trials proved XERECEPT to be very safe and with very mild side-effects such as mild flushing and some minor nausea, nasal congestion, headache and tingling. These early studies showed patients' improvement in neurological function, as well as the ability to enhance radiation therapy for brain tumors.

XERECEPT is now advancing through Phase III clinical trials. The first of two concurrent, multi-center studies was initiated in April 2004 as the first controlled studies of peritumoral brain swelling. The two studies include the "acute protocol" (XERECEPT or dexamethasone needed immediately) and a "chronic protocol" or a dex-sparing trial (patients already on chronically high doses of dexamethasone but with an urgent need to dramatically lower their intake). The third study, an open-label, extended-use study of XERECEPT began enrollment August 25, 2005. This study is open to all patients who participate in one of the two ongoing blinded, Phase III trials designed to determine the dexamethasone-sparing effects of hCRF in brain tumor patients being treated for peritumoral brain edema. This extended-use program will collect safety information and allow the treating physicians to attempt a maximum dexamethasone reduction and possible elimination altogether. XERECEPT will be provided to enrolled patients until the drug's FDA approval and commercial launch.

About Neurobiological Technologies, Inc.

NTI is an emerging drug development company focused on the clinical evaluation and regulatory approval of neuroscience drugs. The company's strategy is to in-license and develop early- and later-stage drug candidates that target major medical needs and which can be rapidly commercialized. NTI's experienced management team oversees the human clinical trials necessary to establish preliminary evidence of efficacy and seeks partnerships with pharmaceutical and biotechnology companies to complete development and marketing of its product candidates.

About Celtic Pharmaceutical Holdings L.P.

Celtic Pharmaceutical Holdings L.P. (Celtic Pharma) is a global private equity firm focused on the biotechnology and pharmaceutical industries. Celtic Pharma was founded by Stephen Evans-Freke and John Mayo, CBE and is based in Bermuda. Celtic Pharma acquires late stage pharmaceutical programmes and drives these programmes through the final stages of regulatory approval. Celtic Pharma's aim is to bridge the gap between the established pharmaceutical companies' new product pipeline crisis and the biotech industry's capital drought. For further information, please visit Celtic Pharma's website at www.celticpharma.com.

Enquiries

Celtic Pharma
Kathy Armstrong
+1 212 755 2386
Kathy@celticpharma.com

Cautionary Note Regarding Forward-Looking Statements

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties, including: our dependence on third parties for the development, regulatory approval and successful commercialization of our products, the inherent risk of failure in developing product candidates based on new technologies, risks associated with the costs of clinical development efforts, and other risks detailed from time to time in our Securities and Exchange Commission filings. Actual results may differ materially from those projected. These forward-looking statements represent our judgment as of the date of the release. We disclaim, however, any intent or obligation to update these forward-looking statements.

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