As revealed last month, the group acquired C-103, a reformulation of orlistat, for an advance payment of US$200,000 plus 10mln M Pharma shares.
A “low single-digit” royalty percentage will be paid to Chelatexx on net sales of the drug.
M Pharma told investors today: "The addition of C-103 provides a novel weight-loss pharmaceutical product to the M Pharma pipeline.
"The company advises that all due diligence has been completed and that it anticipates closing as soon as its current private placement closes, which is anticipated to be prior to the end of June."
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 FDA has confirmed in writing that C-103 is eligible for 505(b)(2) approval in the United States, under which the FDA is permitted to rely, for approval of the new drug, on data not developed by the applicant -- such as published literature or the FDA's finding of safety and/or effectiveness of a previously approved drug product.
M Pharma cautioned, however, there was no guarantee that C-103 will achieve its development goals and that there are no guarantees that C-103 will be approved by any health regulatory agency.