NPSP Provides Rosy Gattex Outlook, Shares up - Analyst Blog


NPS Pharmaceuticals, Inc. ( NPSP ) announced that it expects sales of its sole marketed product Gattex to jump by over 250% in 2014 over the 2013 expected sales of $31.5 million. Sales of Gattex in 2014 are expected in the range of $110 million- $120 million. The rosy outlook impressed the investors with shares of the company climbing 6.46% to close the trading session on Jan 8 at $35.11.

We note that Gattex is available in the U.S. (since Feb 2013) for treating adults with short bowel syndrome (SBS), dependent on parenteral support. The drug was cleared in the EU in 2012 (European trade name: Revestive). NPS Pharma expects to launch the drug in the EU in the first half of 2014.

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.

NPS Pharma said further that as per its preliminary 2013 results, as of Dec 31 303 patients were undergoing Gattex therapy and 530 prescriptions were received. The comparable figures as of Nov 1 were 235 and 452. We note that the expected 2013 figures pertaining to Gattex sales and the number of patients undergoing the SBS drug therapy were within the guidance range provided by NPS Pharma in 2013.

NPS Pharma also announced that the U.S. Food and Drug Administration (FDA) has accepted the company's Biologic License Application (BLA) on its lead pipeline candidate Natpara (rhPTH [1-84]) for standard review. A decision from the FDA is expected by Oct 24, 2014. The company is looking to get Natpara, which has been granted orphan drug status in the U.S. and EU, approved for treating hypoparathyroidism. We note that the BLA was submitted by NPS Pharma to the FDA in Oct 2013.

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. The successful development and subsequent commercialization of the pipeline would reduce the company's dependence on Gattex. 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). Better ranked stocks include Sucampo Pharmaceuticals, Inc. ( SCMP ), Forest Laboratories Inc. ( FRX ) and WuXi PharmaTech (Cayman) Inc. ( WX ). All 3 stocks carry a Zacks Rank #1 (Strong Buy).

FOREST LABS A (FRX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: FRX , NPSP , SBS , SCMP , WX

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