NPS Pharmaceuticals, Inc. (NASDAQ: NPSP), a specialty pharmaceutical
company developing orphan therapeutics for rare gastrointestinal and
endocrine disorders, today reported its results for the first quarter of
2012.
NPS reported a net loss of $10.6 million or $0.12 per diluted share for
the first quarter of 2012, compared to a net loss of $9.2 million or
$0.13 per diluted share for the first quarter of 2011. Cash and
investments totaled $137.7 million at March 31, 2012, compared with
$162.2 million at December 31, 2011.
"It's an exciting time for NPS as we pursue marketing approvals for both
Gattex and Natpara," said Francois Nader, MD, president and chief
executive officer of NPS Pharmaceuticals. "We were very pleased to
report earlier today that four additional patients completely eliminated
their dependence on parenteral nutrition and intravenous fluids while on
long-term Gattex therapy in the ongoing STEPS 2 open-label extension
study. There are now a total of 11 patients who achieved independence
from PN and IV fluids while on Gattex therapy. This is a dramatic
finding that reinforces our belief in the value of Gattex as a
first-in-class therapy. The FDA is reviewing our New Drug Application
for Gattex with a current action date of September 30, 2012."
Dr. Nader added, "In parallel, we are preparing our Biologics License
Application (BLA) for Natpara in hypoparathyroidism and our submission
remains on track for later this year. We expect to gain additional
insights at our pre-BLA meeting with the FDA later this month. And we
are also eager to present additional data from the REPLACE study at the
annual meeting of the Endocrine Society in June."
Recent product development highlights
Gattex® (teduglutide) in short bowel syndrome
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Today the company reported that four additional patients were
successfully weaned from parenteral nutrition (PN) and intravenous
(IV) fluids in STEPS 2, a 24-month open-label continuation study in
which all participants receive Gattex therapy. To date, a total of
seven patients participating in the ongoing STEPS 2 study have
achieved independence from PN and IV fluids. These seven patients had
depended on PN/IV fluids for periods ranging from two to 14 years.
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NPS recently received confirmation from the U.S. Food and Drug
Administration (FDA) that it will convene an advisory committee
meeting with respect to the Gattex New Drug Application (NDA) and
scheduling activities are ongoing. If the advisory committee meeting
cannot be scheduled in a timely manner or if additional information or
analyses are solicited by FDA as a result of their Mid-cycle Review
Meeting, the current Prescription Drug User Fee Act (PDUFA) target
action date of September 30, 2012 could be extended.
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The characteristics of seven patients with short bowel syndrome who
previously achieved independence from PN and IV fluids while on Gattex
therapy in two Phase 3 studies will be presented during a poster
session at Digestive Disease Week® (DDW®) in
May. Three patients are from the ongoing STEPS 2 study and four
patients were from the company's earlier Phase 3 studies. Additional
poster presentations will include an analysis of plasma citrulline in
patients treated with Gattex, as well as the effects of Gattex on
gastric emptying in healthy subjects.
Natpara™ (recombinant human parathyroid hormone [1-84]) in
hypoparathyroidism
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Results of REPLACE, the company's Phase 3 registration study of
Natpara in hypoparathyroidism, have been accepted as an oral
presentation at ENDO 2012, the annual meeting of The Endocrine
Society, in June. Additional poster presentations will include: (i)
baseline demographics and subject characteristics and (ii) safety and
tolerability in the REPLACE study.
NPSP790 and NPSP795 (calcilytics)
The transfer of technology from GlaxoSmithKline (GSK) is underway for
two Phase 1 calcilytic compounds, NPSP790 and NPSP795. NPS believes
calcilytics may have clinical application in treating rare disorders
involving increased calcium receptor activity, such as autosomal
dominant hypocalcemia with hypercalciuria or ADHH. NPS received these
two compounds under an August 2011 agreement with GSK.
Financial results
Royalties
Royalty revenues were $22.9 million for the first quarter of 2012,
compared with $18.6 million for the first quarter of 2011. NPS earns
royalties on (i) Amgen's sales of Sensipar®/Mimpara®
(cinacalcet HCl), (ii) Nycomed's sales of Preotact® (recombinant
parathyroid hormone 1-84 [rDNA origin] injection), (iii) Kyowa Hakko
Kirin's sales of REGPARA® (cinacalcet HCl), and (iv) Janssen
Pharmaceuticals' sales of NUCYNTA® (tapentadol) and NUCYNTA®
ER (tapentadol extended-release tablets).
The components of royalties are summarized as follows:
The company's royalty rights related to Sensipar/Mimpara, Preotact, and
REGPARA have been partially monetized and classified as non-recourse
debt. After repayment of the obligations, as set forth in the
agreements, any remaining cash flows from these royalties will return to
NPS.
Research and development
Research and development expenses were $20.2 million for the first
quarter of 2012, compared with $14.9 million for the first quarter of
2011. The increase in research and development expenses was due to the
advancement of the company's short bowel syndrome and hypoparathyroidism
product registration programs.
General and administrative
General and administrative expenses were $7.8 million for the first
quarter of 2012, compared with $5.1 million for the first quarter of
2011. The increase in general and administrative expenses was due to
costs related to commercial-readiness activities.
Interest expense
Interest expense was $5.5 million for the first quarter of 2012 and
$10.2 million for the first quarter of 2011. Interest expense is largely
attributable to non-recourse debt secured by the company's
Sensipar/Mimpara, Preotact, and REGPARA royalties. The decline in
interest expense was primarily attributable to a reduction in the
outstanding principal and interest rate associated with
Sensipar/Mimpara-secured non-recourse debt.
Cash and investments
At March 31, 2012, the company's cash, cash equivalents, and marketable
investment securities totaled approximately $138 million compared with
$162 million at December 31, 2011.
NPS continues to expect its 2012 cash burn to be in the range of $105 to
$125 million. The company's cash burn is defined as the net change in
cash, cash equivalents, and marketable investment securities, excluding
any proceeds from external financing activities.
Cash burn is a non-GAAP financial measure that may be considered in
addition to results prepared in accordance with U.S. generally accepted
accounting principles (GAAP). This non-GAAP measure should not be
considered a substitute for, or superior to, GAAP results. NPS believes
that cash burn is relevant and useful information for the company and
its investors as it provides a meaningful way of determining cash
available for and net cash used in operations of the company.
Long-term debt
At March 31, 2012, the company's only recourse debt was $16.5 million in
5.75% convertible notes due in 2014.
The other debt on the company's balance sheet is non-recourse to the
company and solely secured by its royalty rights related to
Sensipar/Mimpara, Preotact, and REGPARA. After repayment of the
obligations, as set forth in the agreements, the cash flows from the
royalties will return to NPS.
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