NPS Pharmaceuticals, Inc. (NASDAQ:NPSP), a global biopharmaceutical company pioneering and delivering therapies that transform the lives of patients with rare diseases worldwide, today reported financial results for 2013 and its financial outlook for 2014.
NPS reported net global product sales of $15.3 million for the fourth quarter of 2013 and $31.8 million for the full year. These results are at the high end of the company's 2013 guidance of $28 to $32 million in net sales. In February 2013, NPS launched and initiated sales of its first commercial product Gattex® (teduglutide [rDNA origin]) for injection in the US for the treatment of patients with adult Short Bowel Syndrome (SBS) who are dependent on parenteral support. Teduglutide is also approved in the European Union (EU) under the trade name Revestive® and is expected to launch in certain countries in 2014.
"2013 was a transformative year in which we successfully established NPS as a global commercial rare disease company with the US launch of Gattex and the regaining of the ex-US rights to our two products," said Francois Nader, MD, president and chief executive officer of NPS Pharmaceuticals. "Looking forward to 2014, we will continue to execute our growth strategy to build a premier global orphan drug business. Our key initiatives are growing Gattex sales in the US, launching Revestive in certain ex-US markets, securing US approval of Natpara for hypoparathyroidism, and building a global pipeline of innovative, 'first-in' or 'best-in' rare disease therapeutics."
Gattex® 2013 launch highlights
As of December 31, there were 303 patients on Gattex, which was in line with the company's guidance of 275 to 325 patients, and 530 Gattex/Revestive prescriptions were received.
Other business highlights
Gattex/Revestive (teduglutide) in Short Bowel Syndrome
NPS has finalized its core value dossier and is now tailoring it to the relevant ex-US countries. The company continues to expect to begin pricing/reimbursement discussions with authorities in selected EU countries during the first half of 2014.
The company has initiated named-patient programs in certain ex-US countries, including Argentina, Turkey, and Brazil.
NPS is implementing its clinical and regulatory strategy for Japan, which includes filing for orphan drug status in 2014.
The company continues to expect that it will begin recognizing meaningful commercial sales from ex-US territories in the second half of 2014.
Patient dosing is underway in a global registration study of pediatric patients with SBS. The 12-week, open-label study will be conducted at approximately 20 sites throughout the US and Europe.
New data from the two-year open-label STEPS 2 extension study have been submitted to the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA) for inclusion in the US and EU prescribing information. The results from STEPS 2 show that long-term treatment with 30 months of Gattex/Revestive resulted in clinically meaningful reductions in parenteral support dependence with a significant percentage of patients achieving complete independence.
Natpara® (recombinant human parathyroid hormone [1-84] or rhPTH 1-84) in Hypoparathyroidism
The company's Biologics License Application (BLA) for its second product, Natpara in Hypoparathyroidism, has been accepted by the FDA with a Prescription Drug User Fee Act (PDUFA) goal date of October 24, 2014. Within the company's Filing Review Notification, also referred to as the Day-74 letter, the FDA also informed the company it is currently planning to hold an advisory committee meeting to discuss the Natpara BLA.
NPS expects to submit its Marketing Authorization Application to the EMA for Natpara in Hypoparathyroidism this year. The European Commission recently granted orphan drug designation to Natpara for the treatment of Hypoparathyroidism. This designation provides marketing exclusivity in the EU for 10 years after approval.
NPS remains on track to initiate a Phase 2a proof-of-concept study in mid-2014 for NPSP795, a calcilytic compound with potential application in Autosomal Dominant Hypocalcemia or ADH, an ultra-rare disorder caused by a gain-of-function mutation in the calcium-sensing receptor gene.
Net income (loss)
NPS reported net income of $7.8 million or $0.07 per diluted share for the fourth quarter of 2013, compared to a net loss of $12.2 million or $0.14 per diluted share for the fourth quarter of 2012. For the full year, NPS reported a net loss of $13.5 million or $0.14 per diluted share in 2013 versus a net loss of $18.7 million or $0.22 per diluted share in 2012.
Revenues are comprised of net product sales for Gattex, which was launched in the US in the first quarter of 2013, and royalty revenues. Net sales were $15.3 million for the fourth quarter of 2013 and $31.8 million for the full year compared to $0 for the same periods in the prior year.
Royalty revenues were $39.2 million for the fourth quarter of 2013 and $27.1 million for the fourth quarter of 2012. For the full year, royalty revenues were $123.8 million for 2013 compared with $105.6 million for 2012. NPS earns royalties on (i) Amgen's sales of Sensipar®/Mimpara® (cinacalcet HCl), (ii) Kyowa Hakko Kirin's sales of REGPARA® (cinacalcet HCl), and (iii) Janssen Pharmaceuticals' sales of NUCYNTA® (tapentadol) and NUCYNTA® ER (tapentadol extended-release tablets).
The company's fourth quarter 2013 Sensipar/Mimpara royalties included a non-recurring favorable adjustment from Amgen. On February 15, 2014, the company received a cash payment of $22.8 million for the Sensipar/Mimpara royalties earned during the fourth quarter of 2013. Amgen retained $8 million of Sensipar/Mimpara royalties to repay a royalty advance received in August 2011.
Research and development
Research and development expenses were $20.0 million for the fourth quarter of 2013 compared to $24.0 million for the fourth quarter of 2012. For the full year, research and development expenses were $85.4 million for 2013 compared to $94.8 million for 2012. The decrease in 2013 research and development expenses was primarily due to a reduction in clinical development activities for Gattex and Natpara.
Selling, general and administrative
Selling, general and administrative expenses were $21.9 million for the fourth quarter of 2013 compared to $11.2 million for the fourth quarter of 2012. For the full year, selling, general and administrative costs were $68.1 million for 2013 compared to $36.9 million for 2012. The increase in 2013 selling, general and administrative expenses was primarily due to launch and pre-launch activities for Gattex/Revestive and Natpara, respectively, including personnel-related expenses.
Cash and investments
The company's cash, cash equivalents, and marketable investment securities were approximately $180 million at December 31, 2013 compared with $101 million at December 31, 2012.
At December 31, 2013, 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, rhPTH 1-84, 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, 2013 and 2012:
2014 Financial guidance
NPS expects to achieve the following financial objectives in 2014:
Net Gattex/Revestive sales of between $110 and $120 million, representing more than 250% growth in the company's SBS franchise.
Operating expenses, excluding cost of sales and share-based compensation expense, of between $180 and $200 million. The anticipated increase in 2014 operating expenses is primarily related to the following investments that NPS is making to drive continued long-term, global growth:
The build-out of the company's infrastructure and core competencies to support the continued growth of NPS as a global organization.
The production of pre-launch Natpara inventory and the establishment of secondary supply-chain sources.
The pre-launch initiatives and the event-driven ramp up of the US commercial infrastructure to support the successful commercialization of Natpara. Key pre-launch activities include generating awareness on the burden of hypoparathyroidism, creating an unbranded platform, deploying a pre-launch field-based team, and identifying patients.
The execution of clinical activities supporting the global development of Gattex/Revestive in pediatric SBS and NPSP795 in ADH.
Regulatory activities, including preparations for an FDA Advisory Committee meeting and key international regulatory submissions for Natpara in hypoparathyroidism.
SOURCE NPS Pharmaceuticals, Inc