NPS Pharmaceuticals, Inc.
) posted earnings of 7 cents per share in the fourth quarter of
2013 surpassing the Zacks Consensus Estimate by 4 cents. The
company had reported a loss of 14 cents per share in the final
quarter of 2012. Favorable results in the fourth quarter of 2013
were primarily due to higher revenues. We expect the stock to be
favorably impacted due to the profit reported by the company.
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Full year 2013 revenues increased 19.1% to $155.6 million,
topping the Zacks Consensus Estimate of $146 million. Full year
2013 loss narrowed to 14 cents per share from 22 cents a year
ago. The Zacks Consensus Estimate hinted at a loss of 19 cents
The Fourth Quarter in Detail
Revenues in the final quarter of 2013 jumped approximately 101%
to $54.5 million. The massive jump was primarily due to increased
) Sensipar. Sales of NPS Pharma's sole marketed product Gattex,
which were absent a year ago, also contributed to the surge in
revenues. Revenues easily beat the Zacks Consensus Estimate of
Royalty revenues climbed 44.6% to $39.2 million in the final
quarter of 2013. Bulk of the royalty revenues ($36.4 million)
came from Sensipar.
NPS Pharma launched Gattex in the U.S. in Feb 2013, following
approval by the U.S. Food and Drug Administration (FDA) in Dec
2012. The drug was cleared for treating adults with short bowel
syndrome, dependent on parenteral support. The drug was cleared
in the EU in 2012 (European trade name: Revestive).
Gattex sales in the reported quarter were $15.3 million. The
company stated that 303 patients were undergoing Gattex therapy
and 530 prescriptions were received as of Dec 31, 2013.
Research and development expenses declined 16.6% to $20 million
in the fourth quarter of 2013 due to lower clinical development
activities. General and administrative expenses jumped to $21.9
million in the fourth quarter of 2013 from $11.2 million a year
ago. The massive increase was primarily due to costs pertaining
to Gattex's marketing in the U.S.
NPS Pharma maintained the outlook for 2014 which it had announced
last month. NPS Pharma still expects sales of Gattex to jump by
over 250% in 2014 over the 2013 figure of $31.5 million. Sales of
Gattex in 2014 are expected in the range of $110 million-$120
million. Operating expenses (excluding cost of goods sold and
share-based compensation expense) in 2014 are projected in the
range of $180 million-$200 million, up from 2013 levels. The
increase is attributable to NPS Pharma's efforts to develop its
pipeline and sustain growth.
We are not surprised by the impressive numbers and the rosy 2014
guidance provided by NPS Pharma as the preliminary results and
the 2014 outlook were already announced by the biopharmaceutical
company last month.
A key action date for NPS Pharma is coming up in October this
year when the FDA will decide on its lead pipeline candidate
Natpara (hypoparathyroidism). Natpara approval will augment the
company's top line and reduce its dependence on Gattex.
Another interesting candidate in NPS Pharma's pipeline is NPSP795
(autosomal dominant hypocalcemia). NPS Pharma intends to make
significant efforts to advance the development of the candidate
during the course of the year (a phase IIa proof of concept study
on the candidate is expected to be initiated in mid 2014). We
expect investor focus to remain on updates relating to Gattex as
well as NPS Pharma's pipeline going forward.
NPS Pharma carries a Zacks Rank #3 (Hold). Some better-ranked
stocks in the biopharma space include
Alexion Pharmaceuticals, Inc.
Emergent BioSolutions, Inc.
) with a Zacks Rank #1 (Strong Buy).