NPS Pharmaceuticals Seems Like A Bargain
by Andrew Vaino
NPS Pharmaceuticals (NPSP), which was trading as high as $15 earlier this year, has taken two major hits recently. In March the stock dropped a third when they announced a delay in getting their Preos osteoporosis drug on the market. The stock then dropped by almost a half, to $5, in May when they announced that the FDA had recommended a new clinical trial. They have submitted to the FDA a clinical protocol for a 12 month NDA enabling study to meet this requirement.
Now, a new clinical trial is a major setback, but I don’t think it’s anywhere near a death knell. The company’s net current assets will see it through a couple of years. It is worth noting that Preos was approved for sale in Europe in April. With an aging population, demand for osteoporosis drugs is only going to increase.
In addition to Preos, NPS licensed Cinacelcet HCl from Amgen. This drug is marketed in Europe and the US for hyperparathyroidism in patients requiring dialysis, and for patients with parathyroid carcinoma. While revenue from Cinacelet isn’t great, it does demonstrate they know how to sell drugs.
NPS also has a Phase 3 study underway on Teduglutide, a treatment for patients with short bowel syndrome (the drug acts to make absorption through the smaller length of intestine more effective). Results of this study could be available early next year. This drug has also shown potential in Crohn’s disease, and a Phase 2a study in support of this has been completed. If NPS is able to gain marketing approval for Teduglutide there will be nothing to prevent physicians from prescribing it to patients with Crohn’s disease. While this “off-label” prescribing is not encouraged (and companies can’t market the drug for off-label use) it does occur frequently.
NPS has been dealt a couple of setbacks. There will always be uncertainty in any clinical trial. My take is a stock trading in the $5 range, with two late stage clinical candidates and an enterprise value $200M more than its market cap seems like a pretty good deal.
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by Andrew Vaino
NPS Pharmaceuticals (NPSP), which was trading as high as $15 earlier this year, has taken two major hits recently. In March the stock dropped a third when they announced a delay in getting their Preos osteoporosis drug on the market. The stock then dropped by almost a half, to $5, in May when they announced that the FDA had recommended a new clinical trial. They have submitted to the FDA a clinical protocol for a 12 month NDA enabling study to meet this requirement. 
Now, a new clinical trial is a major setback, but I don’t think it’s anywhere near a death knell. The company’s net current assets will see it through a couple of years. It is worth noting that Preos was approved for sale in Europe in April. With an aging population, demand for osteoporosis drugs is only going to increase.In addition to Preos, NPS licensed Cinacelcet HCl from Amgen. This drug is marketed in Europe and the US for hyperparathyroidism in patients requiring dialysis, and for patients with parathyroid carcinoma. While revenue from Cinacelet isn’t great, it does demonstrate they know how to sell drugs.
NPS also has a Phase 3 study underway on Teduglutide, a treatment for patients with short bowel syndrome (the drug acts to make absorption through the smaller length of intestine more effective). Results of this study could be available early next year. This drug has also shown potential in Crohn’s disease, and a Phase 2a study in support of this has been completed. If NPS is able to gain marketing approval for Teduglutide there will be nothing to prevent physicians from prescribing it to patients with Crohn’s disease. While this “off-label” prescribing is not encouraged (and companies can’t market the drug for off-label use) it does occur frequently.
NPS has been dealt a couple of setbacks. There will always be uncertainty in any clinical trial. My take is a stock trading in the $5 range, with two late stage clinical candidates and an enterprise value $200M more than its market cap seems like a pretty good deal.
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posted by Nico at
3:05 PM
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