NPS Pharmaceuticals, Inc. (NASDAQ: NPSP), a biopharmaceutical company pioneering and delivering therapies that transform the lives of patients with rare diseases worldwide, reported its results for the second quarter ended June 30, 2013. “Having successfully addressed the fill-finish issue, we are pleased to report that we will file our Biologic License Application for Natpara before the end of this year,” said Francois Nader, MD, president and chief executive officer of NPS Pharmaceuticals. “Our commitment to flawless execution has yielded solid second quarter results including Gattex sales that exceeded our own expectations. We are particularly gratified to have already brought this life-changing treatment to 141 Short Bowel Syndrome patients and I am pleased to report that we are increasing our guidance to 275 to 325 patients on therapy by the end of the year.” “In addition, having completed our assessment of the international market, we believe the peak annual ex-U.S. revenue potential for Revestive is greater than the U.S. given the estimated 6,000 to 12,000 addressable patients in our targeted countries; however we anticipate a slower ramp than the U.S. Our international strategy is now being implemented with the establishment of our international headquarters in Dublin, the initiation of the EU pricing and reimbursement process, and the implementation of named-patient programs in certain countries,” added Dr. Nader. Highlights Gattex ® (U.S.)/Revestive ® (Ex-U.S.) (teduglutide [rDNA origin]) for injection
- Gattex sales totaled $4.8 million for the second quarter of 2013. Gattex (ex-U.S. tradename: Revestive) is the first prescription medicine for the long-term treatment of adults with short bowel syndrome who are dependent on parenteral support.
- The company expects to achieve net global Gattex/Revestive sales of $25 to $30 million for 2013.
- As of August 2, 2013, 318 prescriptions have been received and 141 patients are currently on therapy in the U.S. As previously guided, it is expected to take an average of 90 to 120 days to dispense Gattex to patients after it is prescribed.
- The company has begun implementing its international strategy that is transforming NPS into a global commercial rare disease company. NPS expects the first ex-U.S. commercial sales of Revestive to commence on an early access/named-patient basis in certain countries in late 2013 or early 2014 with meaningful revenues expected to begin in the second half of 2014.
- The company is preparing to engage in the pricing and reimbursement processes in key European countries with the goal of commercially launching Revestive in Europe in the first half of 2014.
- With an estimated 6,000 to 12,000 SBS patients eligible for treatment in the company’s targeted ex-U.S. countries, NPS believes the international peak annual sales opportunity for Revestive is greater than that of Gattex in the U.S.
- The company has successfully addressed the previously reported fill-finish issues related to the manufacture of Natpara and expects to submit its Biologic License Application to the U.S. Food and Drug Administration (FDA) in the fourth quarter of 2013. Natpara is the first bioengineered replica of human parathyroid hormone developed for hypoparathyroidism, a rare, complex endocrine disorder in which the body produces insufficient parathyroid hormone.
- In June 2013, researchers presented initial findings from PARADOX, a 374-patient survey assessing the burden of illness of hypoparathyroidism, which was conducted in partnership with the Mayo Clinical and the Hypoparathyroidism Association. The findings revealed that 99 percent of patients with this rare, complex endocrine disorder experience multiple physical, emotional and cognitive symptoms despite taking medications, such as vitamin D and calcium. Further, 69 percent of these patients experience serious comorbid conditions, including heart arrhythmias and kidney stones. These findings were presented at ENDO 2013, the Annual Meeting of the Endocrine Society.
- The company recently initiated enrollment of PARADIGHM, a global natural history registry for patients with hypoparathyroidism. Patients will be enrolled and followed for at least 10 years to characterize the disorder under conditions of normal clinical practice.
- After receiving feedback from the FDA and the European Medicines Agency, NPS expects to begin enrollment in a Phase 3 global study of Gattex/Revestive in pediatric patients with SBS before the end of 2013.
- NPS recently met with the FDA to review its development strategy for its NPSP795 calcilytic compound in autosomal dominant hypocalcemia or ADH. Based on this meeting, the company plans to initiate a Phase 2a proof-of-concept study in mid-2014.
- In May, NPS sold 6.9 million shares of its common stock and received aggregate net proceeds of approximately $93.5 million.
Net lossNPS reported a net loss of $12.4 million or $0.16 per diluted share for the second quarter of 2013 compared to net income of $7.4 million or $0.08 per diluted share for the second quarter of 2012. The company’s financial results for the second quarter of 2013 were negatively impacted by a $10.6 million non-cash charge for Preotact® inventory designated for research and development activities and expensed during the period. This inventory was received when the company regained the international rights to this product. The company’s financial results for the prior year period were positively impacted by $25 million in revenue related to the sale to Amgen of its rights to receive royalties from sales of cinacalcet HCl (Sensipar®/Mimpara®) that would have been earned after December 31, 2018. Revenues Revenues are comprised of net product sales for Gattex, which was launched in the first quarter of 2013, and royalty revenues. Sales of Gattex were $4.8 million for the second quarter of 2013, compared to $0 for the second quarter of 2012. Royalty revenues were $31.7 million for the second quarter of 2013 compared to $28.5 million for the second quarter of 2012. NPS earns royalties on (i) Amgen’s sales of Sensipar ®/Mimpara ® (cinacalcet HCl), (ii) Kyowa Hakko Kirin’s sales of REGPARA ® (cinacalcet HCl), and (iii) Janssen Pharmaceuticals’ sales of NUCYNTA ® (tapentadol) and NUCYNTA ® ER (tapentadol extended-release tablets). The components of royalties are summarized as follows:
|In millions||Quarter endedJune 30,||Six months endedJune 30,|
|NUCYNTA and other||0.8||0.8||1.5||1.4|
Research and developmentResearch and development expenses were $30.9 million for the second quarter of 2013 compared to $32.6 million for the second quarter of 2012. The decrease in research and development expenses was due to a reduction in costs associated with clinical development activities for Gattex and Natpara in the second quarter of 2013. This was partially offset by the aforementioned non-cash charge of $10.6 million related to Preotact inventory. General and administrative General and administrative expenses were $14.5 million for the second quarter of 2013 compared to $9.7 million for the second quarter of 2012. The increase in general and administrative expenses was primarily due to personnel and other external costs related to the U.S. launch of Gattex. Interest expense Interest expense was $3.0 million for the second quarter of 2013 compared to $4.5 million for the second quarter of 2012. Interest expense was largely attributable to non-recourse debt secured by the company’s Sensipar/Mimpara, REGPARA, and Preotact (rhPTH 1-84) 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, as well as lower effective interest rates associated with the REGPARA- and Preotact-secured non-recourse debt. Cash and investments The company’s cash, cash equivalents, and marketable investment securities were approximately $181 million at June 30, 2013 compared to $101 million at December 31, 2012. Long-term debt At June 30, 2013, the company’s recourse debt was $16.5 million in 5.75% convertible notes due in August 2014. All other debt on the company’s balance sheet is non-recourse and secured solely by royalties related to Sensipar/Mimpara, REGPARA, and sales of PTH 1-84 in the EU, CIS, and Turkey. After repayment of these obligations, the cash flows from these royalties will revert to NPS in accordance with the terms set forth in each agreement.
The following table reflects the company’s non-recourse debt at June 30, 2013 and December 31, 2012:
|June 30,2013||December 31,2012|
|PTH 1-84-secured (EU, CIS and Turkey)||42.8||42.8|
|Total non-recourse debt||146.6||159.3|
|Less current portion||7.6||6.3|
|Total long-term non-recourse debt||$139.0||$153.0|
The company now expects to achieve global Gattex/Revestive sales of $25 to $30 million in 2013 with 275 to 325 patients on therapy by the end of the year. For 2013 only, the company will report the number of prescription and the number of patients on Gattex/Revestive in connection with its quarterly financial results.NPS is also improving its guidance for its gross-to-net adjustment for U.S. Gattex sales and now expects this to be between eight and 12 percent in 2013 versus its previous guidance of between 10 and 14 percent. Conference Call Information NPS will host a conference call beginning today at 5:00 p.m. Eastern Time. To participate in the conference call, dial (866) 515-2910 and use pass code 33048269. International callers may dial (617) 399-5124, using the same pass code. In addition, a live audio of the conference call will be available over the Internet. Interested parties can access the event through the NPS website, http://www.npsp.com. For those unable to participate in the live call, a replay will be available at (888) 286-8010, with pass code 43569894, until midnight Eastern Time, August 22, 2013. International callers may access the replay by dialing (617) 801-6888, using the same pass code. The webcast will also be available through the NPS website for the same period. About NPS Pharmaceuticals NPS Pharmaceuticals is a biopharmaceutical company pioneering and delivering therapies that transform the lives of patients with rare diseases worldwide. The company’s lead product, Gattex ® (U.S.)/Revestive ® (ex-U.S.) (teduglutide [rDNA origin]) for injection is approved for adult Short Bowel Syndrome (SBS) patients who are dependent on parenteral support. NPS has also developed Natpara ® (rhPTH [1-84]) for the treatment of adult hypoparathyroidism and expects to submit its marketing application to the U.S. Food and Drug Administration in the fourth quarter of 2013. NPS's earlier stage pipeline includes two calcilytic compounds, NPSP790 and NPSP795, with potential application in rare disorders involving increased calcium receptor activity, such as autosomal dominant hypocalcemia (ADH). NPS complements its proprietary programs with a royalty-based portfolio of products and product candidates that includes agreements with Amgen, GlaxoSmithKline, Janssen Pharmaceuticals, and Kyowa Hakko Kirin. Additional information about NPS is available through its corporate website, http://www.npsp.com. “NPS,” “NPS Pharmaceuticals,” “Gattex,” “Natpara,” “Revestive,” “Preotact,” and “NPS Advantage” are the company's trademarks. All other trademarks, trade names or service marks appearing in this press release are the property of their respective owners.
Disclosure noticeStatements made in this press release, which are not historical in nature, constitute forward-looking statements for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These statements are based on the company's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Forward looking statements include, but are not limited to, statements concerning the company’s future financial performance. Risks associated to the company's business include, but are not limited to, the risks associated with any failure by the company to successfully commercialize Gattex (teduglutide [rDNA origin]) for injection, including the risk that physicians and patients may not see the advantages of Gattex and may therefore be reluctant to utilize the product, the risk that private and public payers may be reluctant to cover or provide reimbursement for Gattex, the risks associated with the company's strategy, global macroeconomic conditions, the impact of changes in management or staff levels, the effect of legislation effecting healthcare reform in the United States, as well as other risk factors described in the company's periodic filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K and Form 10-Qs. All information in this press release is as of the date of this release and NPS undertakes no duty to update this information, whether as a result of new information, future events or otherwise. (Financial statements to follow)
|NPS Pharmaceuticals and Subsidiaries Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited)|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Product sales, net||$4,801||$ --||$5,455||$ --|
|Sale of royalty rights||--||25,000||--||25,000|
|Costs and expenses:|
|Cost of goods sold||473||--||538||--|
|Research and development||30,888||32,641||46,583||52,840|
|General and administrative||14,465||9,670||28,670||17,440|
|Total operating expenses||45,826||42,311||75,791||70,280|
|Operating (loss) income||(9,321)||11,206||(13,852)||6,161|
|Other (expense) income:|
|Interest income, net||58||76||113||160|
|Total other expense, net||(3,064)||(3,851)||(6,329)||(9,369)|
|(Loss) income before income tax expense||(12,385)||7,355||(20,181)||(3,208)|
|Income tax expense||4||--||4||--|
|Net (loss) income||($12,389)||$7,355||($20,185)||($3,208)|
|Net (loss) income per common and potential common share:|
|Weighted average common and potential common share:|
|NPS Pharmaceuticals and Subsidiaries Condensed Consolidated Balance Sheets (In thousands) (Unaudited)|
|June 30,||December 31,|
|Cash, cash equivalents and marketable investment securities||$180,522||$100,715|
|Other current assets||6,067||6,060|
|Property and equipment, net||3,963||4,193|
|Debt issuance costs, net||386||436|
|Liabilities and Stockholders’ Equity (Deficit):|
|Non-recourse debt, less current portion*||139,032||153,024|
|Other long-term liabilities||5,455||6,614|
|Common stock and additional paid-in capital||1,114,487||954,539|
|Accumulated other comprehensive (loss) income||(61||)||5|
|Total stockholders' equity (deficit)||85,056||(54,641||)|
|Total liabilities and stockholders' equity (deficit)||$281,485||$151,109|
|* Non-recourse debt secured by Sensipar®/Mimpara®, Preotact® (rhPTH 1-84), and REGPARA® royalty revenue|