NPS Pharma goes global with $80M deal to buy back Takeda's Gattex rights

NPS Pharmaceuticals has locked up the global rights to Gattex. The biotech bought back the ex-U.S. rights to its newly approved orphan drug (teduglutide) alongside another drug program close to a U.S. filing for rare cases of hypoparathyroidism, handing over $50 million in stock--a 7% equity stake in the company--with another $30 million on the table if the company hits a key sales milestone.

Nycomed had originally paid $35 million in an upfront and promised $150 million more in milestones when it garnered the ex-U.S. rights for Gattex alone back when Tony Coles (now the CEO at Onyx) was running NPS. Then Takeda came along and scooped up Nycomed for $14 billion in 2011, which left the Japanese pharma company with orphan drugs that didn't quite fit its vision for the future at a time NPS concluded that the idea of running a global orphan drug company seemed to fit just right.

"We went through a strategic process late last year and looked at the future," NPS CEO Francois Nader tells FierceBiotech. The same global commercialization path worked for Alexion, Genzyme and others, he adds, which led him to believe that this was the right time to talk about a deal with Takeda.

The market cheered the move, boosting the biotech's shares ($NPSP) by 10% this morning.

The new pact leaves NPS with the global rights to Gattex, a pricey short bowel syndrome therapy being marketed for a whopping $295,000 a year. It also locks up the ex-U.S. rights to recombinant human parathyroid hormone 1-84 (PTH 1-84), which is expected to go to the FDA later this year – once the company sorts out a thorny manufacturing issue. PTH 1-84 has been sold for post-menopausal osteoporosis in the E.U. for the past 9 years but NPS has been studying the drug for a rare endocrine disorder in which patients suffer from an insufficient level of a principal regulator of calcium and phosphorus.

The next strategic step for NPS is clear, says Nader, with a keen focus on expanding on the U.S. launch for Gattex while rolling out the drug in Europe, which will require a small sales force, then resolving the manufacturing issue on PTH 1-84 and getting their next application to the FDA.

NPS raised eyebrows last year when it came up with its eye-opening price for Gattex (dubbed Revestive in Europe), a drug that is designed to reduce a few thousand patients' dependence on IV feeding after a portion of their intestines were cut out. But four new drugs debuted last year with a price over $200,000, one reason which helps explain the growing enthusiasm in the industry for rare diseases. And once the combined sales of Gattex and PTH 184 hit $750 million in a calendar year, NPS will owe Takeda another $30 million, payable in cash or stock.   

NPS has forecasted peak U.S. sales of Gattex at $350 million and Nader expects the European patient population to be about the same. But Europe's payers will cover anywhere from a third to the full amount of what U.S. payers will cover,making the market somewhat less lucrative overall.

- here's the press release

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