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 fourth
quarter and year ended December 31, 2012.
"We executed our business plan exceptionally well in 2012 and secured
FDA approval of our first proprietary product, Gattex®," said Francois
Nader, M.D., president and chief executive officer of NPS
Pharmaceuticals. "The launch of Gattex is underway as the first and only
long-term treatment for adult short bowel syndrome, an ultra-orphan and
highly debilitating disorder. Gattex has tremendous potential to
transform patients' lives and grow our business substantially. In the
year ahead, we look forward to providing updates on our launch progress,
reporting results from our STEPS 2 study, and beginning a pediatric
development program for Gattex. We are also preparing for other
important milestones including the submission of our Biologics License
Application for our second proprietary product, Natpara®, as the first
replacement therapy for hypoparathyroidism."
Dr. Nader added: "It is especially notable that our royalty-based
portfolio continues to provide an important financial foundation for our
business, including our Sensipar royalty agreement with Amgen that is
now generating more than $64 million in annual cash flows that are
expected to increase to more than $100 million after repayment of the
Amgen royalty advance."
Gattex launch highlights
Other business highlights
Gattex® (teduglutide) in short bowel syndrome
Natpara® (recombinant human parathyroid
hormone [1-84]) in hypoparathyroidism
Royalty revenues were $27.1 million for the fourth quarter of 2012 and
$26.3 million for the fourth quarter of 2011. For the full year, royalty
revenues were $105.6 million for 2012 compared with $96.5 million for
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:
On February 15, 2013, the company received a cash payment of $16 million
for the Sensipar royalties earned during the fourth quarter of 2012. The
remaining $8 million of Sensipar royalties will be retained to repay a
royalty advance received in August 2011 from Amgen. At December 31,
2012, NPS had $80.2 million in long-term, non-recourse debt secured by
its Sensipar royalties.
Research and development
Research and development expenses were $24.0 million for the fourth
quarter of 2012 and $21.6 million for the fourth quarter of 2011. The
increase in fourth-quarter research and development expense is primarily
driven by personnel-related expenses, including non-cash expense
associated with equity awards that vested upon Gattex approval. For the
full year, research and development expenses were $94.8 million for 2012
compared with $73.8 million for 2011. The increase in 2012 research and
development expenses was primary due to the production of pre-launch
Gattex and Natpara inventory, regulatory activities, medical affairs
activities, and personnel-related costs, which included non-cash expense
associated with equity awards that vested upon the approval of Gattex.
General and administrative
General and administrative expenses were $11.2 million for the fourth
quarter of 2012 and $7.2 million for the fourth quarter of 2011. For the
full year, general and administrative costs were $36.9 million for 2012
compared with $24.2 million for 2011. The increase in general and
administrative expenses was primarily due to commercial-readiness
activities for Gattex and personnel-related expenses, including non-cash
expense associated with equity awards that vested upon the approval of
Interest expense was $3.8 million for the fourth quarter of 2012 and
$6.6 million for the fourth quarter of 2011. For the full year, interest
expense was $18.2 million in 2012 versus $37.7 million in 2011. Interest
expense was largely attributable to non-recourse debt secured by the
company's Sensipar/Mimpara, REGPARA, and Preotact 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
The company's cash, cash equivalents, and marketable investment
securities were approximately $101 million at December 31, 2012 compared
with $162 million at December 31, 2011.
At December 31, 2012, the company's only recourse debt was $16.5 million
in 5.75% convertible notes due in 2014.
All other debt on the company's balance sheet is non-recourse and
secured solely by its royalty rights related to Sensipar/Mimpara,
Preotact, and REGPARA. 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 December
31, 2012 and 2011:
2013 Financial guidance
NPS is providing the following financial guidance for 2013. The guidance
comprises projections based on numerous assumptions, all of which are
subject to certain risks and uncertainties. For a discussion of the
risks and uncertainties associated with these forward-looking
statements, please see the disclosure notice below.
In 2013, NPS expects its operating expenses, including the impact of
share-based compensation, to be between $135 and $145 million.
For 2013, the company will provide the number of patients on Gattex at
the end of each quarter, starting with its second quarter financial
Conference Call Information
NPS will host a conference call beginning today at 4:30 p.m. Eastern
Time. To participate in the conference call, dial (866) 783-2137 and use
pass code 99534128. International callers may dial (857) 350-1596, 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 99734684, until midnight
Eastern Time, March 7, 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® 0.05 mg/kg/d
(teduglutide [rDNA origin]) for injection is FDA-approved for the
treatment of adult patients with short bowel syndrome (SBS) who are
dependent on parenteral support. NPS is also developing Natpara®
(rhPTH[1-84]) for the treatment of adult hypoparathyroidism and expects
to submit its Biologic License Application (BLA) to the FDA in 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 with hypercalciuria (ADHH). NPS complements its proprietary
programs with a royalty-based portfolio of products and product
candidates that includes agreements with Amgen, GlaxoSmithKline, Janssen
Pharmaceuticals, Kyowa Hakko Kirin, and Takeda GmbH.
"NPS," "NPS Pharmaceuticals," "Gattex," and "Natpara" 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.
Statements 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 our 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, 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 that the company may be unable to resolve the manufacturing
issue in order to submit its BLA for Natpara, 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
(Financial statements to follow)
NPS Pharmaceuticals and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Twelve months ended
Net loss per common and potential common share:
Condensed Consolidated Balance Sheets
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