The company has acquired C-103, a reformulation of orlistat, for an advance payment of US$200,000 plus 10mln M Pharma shares, while a “low single-digit” royalty percentage will be paid to Chelatexx on net sales of the drug.
Orlistat is currently marketed in prescription strength by Roche Laboratories and in over-the-counter strength by GlaxoSmithKline Consumer Healthcare, but according to M Pharma, sales of the drug have fallen from their peak due to “uncomfortable and well-publicised” gastrointestinal side effects.
C-103 has been developed to retain efficacy of Orlistat whilst minimising or eliminating the undesirable side effects. The reformulation has been patented by Chelatexx.
“The acquisition of C-103 from Chelatexx LLC is an exciting addition to our obesity portfolio, and we are happy we were able to finally sign this acquisition agreement,” said Brian Keane, interim chief executive officer of M Pharmaceutical.
The deal was scheduled to go through last month but the agreement was allowed to lapse by both sides around the time that previous chief executive officer Mathew Lehman, announced his resignation.
“This product fits into our mission of developing innovative technologies for obesity with fewer side effects than currently available products," Keane said.
The Vancouver-based biotechnology company said it was in the process of raising up to $700,000 by placing new shares and warrants. The units, comprising one M Pharma share plus one warrant convertible into an M Pharma share, are being placed at 2.5 cents each.