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The company late on Friday revealed it had signed an agreement to acquire a weight loss product from Chelatexx LLC.
The product, a reformulated version of orlistat, called C-103, is being added to M Pharmaceuticals portfolio of products designed to fight obesity.
The drug is currently classified as being ‘in development’.
Orlistat is marketed in prescription strength (branded Xenical) by Roche, and has an over-the-counter version which is sold by GlaxoSmithKline (as Alli) though, according to M Pharma, sales of the drug have fallen from their peak due to “uncomfortable and well-publicized” gastrointestinal side effects.
C-103, meanwhile, has been developed to retain efficacy of Orlistat whilst minimizing or eliminating the undesirable side effects. The reformulation is patented by Chelatexx.
“This product fits into our mission of developing innovative technologies for obesity with fewer side effects than currently available products."
It is paying Chelatexx and upfront cash payment and is also issuing 10mln new M Pharmaceutical shares, as well as granting a small royalty on future sales.
The company expects to conclude a definitive agreement within the next 14 days, which would lead to the transaction completing by January.
It also cautioned investors that “there is 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.”
M Pharma also told investors that it is now focussing its attentions on C-103 and its Trimeo product, both of which are designed for the anti-obesity market, whereas investments in it other earlier stage potential products, Trimtec and eMosquito, will now be minimised.
It said it would review potential opportunities to either fully or partially divest those assets.
On the Canadian Securities Exchange, M Pharmaceutical shares gained 3.5 cents, 43.75%, to change hands at C$0.11 each.