NPS Pharmaceuticals Reports Second Quarter 2012 Financial Results
NPS Pharmaceuticals, Inc.Susan M. Mesco, 908-450-5516
NPS Pharmaceuticals, Inc. (NASDAQ: NPSP), a specialty pharmaceutical company developing orphan therapeutics for rare gastrointestinal and endocrine disorders, today reported its results for the second quarter of 2012.
NPS reported net income of $7.4 million or $0.08 per diluted share for the second quarter of 2012, compared to a net loss of $6.1 million or $0.07 per diluted share for the second quarter of 2011. The company’s financial results for the second quarter of 2012 were positively impacted by $25 million in revenue related to the sale to Amgen of its rights to receive royalties from any sales of cinacalcet HCl (Sensipar®/Mimpara®) that otherwise would have been earned after December 31, 2018. NPS received the $25 million payment from Amgen in July 2012. Cash and investments totaled $110.4 million at June 30, 2012, compared with $162.2 million at December 31, 2011.
“This is a transformational time for NPS as we work toward U.S. regulatory approval of our first product, Gattex (teduglutide) in short bowel syndrome and submission of our Biologic License Application for Natpara in hypoparathyroidism,” said Francois Nader, MD, president and chief executive officer, NPS Pharmaceuticals. “We were delighted that our partner Nycomed secured a positive CHMP opinion recommending marketing approval for Revestive® (teduglutide) in Europe. This is an important step in our goal of bringing this much-needed therapy to patients with short bowel syndrome.”
“On the financial front, the cash flow from the deal we recently announced with Amgen is expected to fully support the launches of both Gattex and Natpara and marks a noteworthy step in advancing our goal of becoming a self-sustaining commercial-stage organization,” said Luke Beshar, executive vice president and chief financial officer, NPS Pharmaceuticals. “This transaction has already generated $25 million of new capital. We also expect it to provide at least $50 to $60 million per year of cash now through repayment of the Sensipar royalty advance in 2015. Following repayment of the royalty advance, we will receive our full Sensipar royalty through 2018. This agreement underscores our commitment to access significant capital in a manner that is in the best interests of our shareholders.”
Royalty revenues were $28.5 million for the second quarter of 2012, compared with $27.2 million for the second 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:
On August 15, 2012, the company will receive a cash payment of $15.6 million for the Sensipar royalties earned during the second quarter of 2012. The remaining $8 million of Sensipar royalties will be withheld by Amgen to repay a royalty advance received in August 2011.
Research and development expenses were $32.6 million for the second quarter of 2012, compared with $17.1 million for the second quarter of 2011. The increase in research and development expenses was primarily due to the commercial production of prelaunch Gattex inventory, as well as the advancement of other initiatives to support the company’s short bowel syndrome and hypoparathyroidism product registration programs.
General and administrative expenses were $9.7 million for the second quarter of 2012, compared with $5.5 million for the second quarter of 2011. The increase in general and administrative expenses was primarily due to prelaunch activities for Gattex and Natpara.
Interest expense was $4.5 million for the second quarter of 2012 and $10.3 million for the second quarter of 2011. Interest expense is 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.
At June 30, 2012, the company’s cash, cash equivalents, and marketable investment securities totaled approximately $110 million compared with $162 million at December 31, 2011. In addition, NPS received $25 million from Amgen in July 2012 for the sale to Amgen of its rights to receive royalties from any sales of cinacalcet HCl (Sensipar/Mimpara) that otherwise would have been earned after December 31, 2018.
At June 30, 2012, the company’s only recourse debt was $16.5 million in 5.75% convertible notes due in 2014.
The other debt on the company’s balance sheet is non-recourse to the company and solely secured by its royalty rights related to Sensipar/Mimpara, Preotact, and REGPARA. After repayment of the obligations, as set forth in the agreements, the cash flows from the royalties will return to NPS.
The following table reflects the carrying value of the company’s non-recourse debt at June 30, 2012 and December 31, 2011:
NPS will host a conference call beginning today at 5:00 p.m. Eastern Time. To participate in the conference call, dial (866) 730-5762 and use pass code 76762943. International callers may dial (857) 350-1586, 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, .
For those unable to participate in the live call, a replay will be available at (888) 286-8010, with pass code 81581902, until midnight Eastern Time, August 15, 2012. 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.
NPS Pharmaceuticals is a biopharmaceutical company focused on bringing orphan products to patients with rare disorders and few, if any, therapeutic options. NPS is advancing two late-stage registration programs. A New Drug Application is undergoing FDA review for Gattex® (teduglutide) as a treatment for adult short bowel syndrome (SBS) and a Phase 3 registration study has been completed for Natpara™ (recombinant human parathyroid hormone (rhPTH [1-84]) in adult hypoparathyroidism. NPS’ 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, Kyowa Hakko Kirin, Nycomed (recently acquired by Takeda Pharmaceutical Company Limited), and Janssen Pharmaceuticals.
“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.
(Financial statements to follow)