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NPS Pharmaceuticals Reports Third Quarter 2012 Financial Results And Reiterates Year-end Cash Guidance

NPS Pharmaceuticals, Inc. (NASDAQ: NPSP), a specialty pharmaceutical company developing orphan therapeutics for rare gastrointestinal and endocrine disorders, today reported its results for the third quarter of 2012.

NPS reported a net loss of $3.3 million or $0.04 per diluted share for the third quarter of 2012, compared to a net loss of $12.3 million or $0.14 per diluted share for the third quarter of 2011. Cash and investments totaled $118.7 million at September 30, 2012, compared with $162.2 million at December 31, 2011. NPS continues to expect to end the year with at least $92 million of cash and investments.

“With last month’s unanimous recommendation by FDA’s Gastrointestinal Drugs Advisory Committee, Gattex is poised to become the first significant medical advance for the long-term treatment of SBS in nearly 40 years,” commented Francois Nader, MD, president and chief executive officer, NPS Pharmaceuticals. “Recent data from the Gattex clinical program demonstrate life-changing findings for patients. Specifically, one in seven patients has now achieved complete independence from parenteral support in our ongoing long-term STEPS 2 study. As a result of the committee’s positive vote, we will now be proceeding with the hiring of several key commercial positions and finalizing Gattex launch-readiness. This is a transformational period for NPS and we are thrilled to be one step closer to achieving our goal of bringing Gattex to the market early next year and addressing the unmet needs of people with short bowel syndrome.”

Dr. Nader added: “We also continue to make strong progress towards completing our Biologic License Application for Natpara as the first replacement therapy for hypoparathyroidism. We remain on track to deliver a submission in line with our mid-2013 guidance.”

Pipeline and other business highlights

Gattex ® (teduglutide) in short bowel syndrome

  • On October 16, 2012, the U.S. Food and Drug Administration’s (FDA) Gastrointestinal Drugs Advisory Committee voted unanimously to recommend approval of Gattex® (teduglutide) for adults with short bowel syndrome (SBS). The committee’s recommendation will be considered by the FDA in its review of the company’s New Drug Application (NDA). The Prescription Drug User Fee Act (PDUFA) action date for the Gattex NDA is December 30, 2012.
  • NPS recently reported that five additional patients successfully achieved independence from parenteral nutrition (PN) and/or intravenous fluids (IV) in STEPS 2, an ongoing 24-month, open-label study in adult SBS. To date, 12 patients, or one out of seven, have achieved independence from PN/IV while on Gattex therapy in STEPS 2. Ten of the 12 patients were able to discontinue PN/IV after a year or more on Gattex reinforcing the positive effects of the long-term use of the drug. NPS expects STEPS 2 to complete in early 2013 and will report full results thereafter.
  • At the American College of Gastroenterology Annual Scientific Meeting, investigators reported data related to the seven patients who previously achieved complete independence from PN/IV in STEPS 2. Demographics and disease characteristics for these patients varied widely. The duration of time the patients had been treated with Gattex at the time their PN/IV was discontinued ranged from six months to nearly two years.

Natpara ® (recombinant human parathyroid hormone [1-84]) in hypoparathyroidism

  • NPS continues to be on track to submit its Biologic License Application (BLA) to the FDA by mid-2013 seeking marketing approval of Natpara for hypoparathyroidism.
  • At the Annual Meeting of the American Society for Bone and Mineral Research (ASBMR) investigators presented additional findings from the Phase 3 REPLACE study of Natpara® (rhPTH [1-84]) that showed Natpara initiated bone remodeling as demonstrated by significant increases in bone turnover markers. Investigators also reported results from RELAY, an eight-week study that evaluated 25μg or 50μg daily doses of Natpara and concluded that such dosages may be sufficient for a small percentage of patients with hypoparathyroidism.

NPSP790 and NPSP795 (calcilytics)

  • The clinical development and manufacturing planning processes are underway for the clinical proof-of-concept study of the company’s 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.

Financial results

Royalties

Royalty revenues were $27.0 million for the third quarter of 2012, compared with $24.5 million for the third quarter of 2011. NPS earns royalties on (i) Amgen’s sales of Sensipar ®/Mimpara ® (cinacalcet HCl), (ii) Kyowa Hakko Kirin’s sales of REGPARA ® (cinacalcet HCl), (iii) Nycomed’s sales of Preotact ® (recombinant parathyroid hormone 1-84 [rDNA origin] injection), and (iv) Janssen Pharmaceuticals’ sales of NUCYNTA ® (tapentadol) and NUCYNTA ® ER (tapentadol extended-release tablets).

The components of royalties are summarized as follows:

             
In millions

Three months endedSeptember 30,

Nine months endedSeptember 30,

2012 2011 2012 2011
Royalty:
Sensipar $23.0 $19.8 $65.2 $56.6
REGPARA 2.3 2.0 6.4 5.5
Preotact 1.0 2.1 4.8 6.5
NUCYNTA and other 0.7 0.6 2.1 1.6
Total $27.0 $24.5 $78.5 $70.2
 

On November 15, 2012, the company will receive a cash payment of $15.0 million for the Sensipar royalties earned during the third quarter of 2012. The remaining $8 million of Sensipar royalties will be retained to repay a royalty advance received in August 2011 from Amgen.

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