Singapore, Jan 12, 2012: Napo Pharmaceuticals announced a legal victory in a dispute with Salix Pharmaceuticals. Salix filed a voluntary motion requesting the dismissal of a lawsuit in which Salix had sought access to Napo’s financial books and records. Napo had argued the action was completely without merit.
When granted by the court, Salix’s January 5, 2012, motion to dismiss the lawsuit will establish Napo as the prevailing party in the lawsuit filed by Salix on June 22, 2011. The motion to dismiss seeks a dismissal of Salix’s own lawsuit with prejudice and therefore will bar Salix from pursuing the same claims in the future against Napo.
Ms Lisa Conte, CEO of Napo said,“Salix’s voluntarily dismissal of this action confirms what our company believed all along that the action was completely without merit. We feel vindicated by the final outcome and have already asked the court to require Salix to make a charitable contribution to a non-profit organization, the Healing Forest Conservancy, in an amount equal to the out-of-pocket expenses that we incurred in defending against Salix’s request for certain of our books and records. Our hope is that, with our request to the judge, some good comes of this action for the benefit of Amazonian communities.”
In the meantime, an amended lawsuit that Napo filed against Salix is pending in the Supreme Court of the State of New York, County of New York. Filed on December 28, 2011, the amended complaint claims that Salix breached its contract with Napo and seeks damages for the alleged failure of Salix to use “commercially reasonable efforts to develop and commercialize crofelemer,” a first in class novel drug compound. The lawsuit seeks tens of millions of dollars in damages.
On November 4, 2011, Napo terminated its collaboration agreement with Salix dated December 9, 2008, to commercially develop crofelemer. The compound is a treatment for diarrhea, a life-threatening ailment that impacts millions of people across the world.
The termination was based on Salix’s material breaches of the Collaboration Agreement. Recognizing the importance of crofelemer to address an unmet medical need, the US Food and Drug Administration designated crofelemer for fast track status for the indications of chronic diarrhea in people living with HIV/AIDS and diarrhea-predominant irritable bowel syndrome . Despite positive Phase 3 results announced on November 4, 2010, Salix did not file a new drug application with the FDA until after it was terminated by Napo from the Collaboration Agreement, and did not file for priority review.