NPS Pharmaceuticals Reports 2006 Results and Progress, Announces New Business Plan to Advance Pipeline



    
    Company to Focus on Late-Stage Products and Explore New Indications, Cut
    Costs, Outsource Development Work, Consolidate Operations in New Jersey

    Conference Call/Webcast Scheduled for 3 pm Eastern Time Today
    

    PARSIPPANY, N.J., March 14 /CNW/ -- NPS Pharmaceuticals, Inc. (Nasdaq:  
NPSP) today reported 2006 financial results, reviewed recent corporate and
clinical progress and announced a significant restructuring of operations and
a new business plan to advance its late-stage product candidates, PREOS(R)
(full-length parathyroid hormone [rDNA origin] for injection) and teduglutide.
    NPS President and CEO Tony Coles, M.D., stated: "The main thrust of these
actions is to preserve cash and create additional flexibility to develop the
clinical and commercial potential of our late-stage pipeline.  In 2006, we
exceeded our financial guidance, made important clinical progress with
teduglutide and determined next steps for PREOS in the United States while our
partner, Nycomed, launched the drug in Europe.  In 2007, we plan to advance
these compounds by securing commercial or financial partners, completing the
Phase 3 Short Bowel Syndrome (SBS) and dose-escalation studies for teduglutide
and exploring new indications for both drugs.  With this new business model,
we will focus on high-value specialty indications and rely upon partners to
support large indications.  We will move forward with a consolidated base of
operations and a much smaller team working through contract research
organizations.  We believe these steps will enable us to maximize the value of
our Phase 3 products while reducing cash burn."

    
    Summary of 2006 Achievements
    
    During 2006, NPS made progress in each of its key development programs
and achieved the following corporate goals:

    
    (*)  ended the year with $146 million in cash, exceeding the previous
       year-end cash guidance of $114 to $124 million;

    (*)  completed patient enrollment in the teduglutide Phase 3 study in
       patients with SBS;

    (*)  initiated a dose-escalating pharmacokinetic and tolerability study of
       teduglutide in healthy volunteers;

    (*)  submitted a Phase 3b protocol to the U.S. Food and Drug Administration
       (FDA) to complete clinical development of PREOS as a treatment for
       post-menopausal osteoporosis;

    (*)  signed a licensing agreement with GlaxoSmithKline for a new series of
       back-up calcilytic compounds and an agreement with Johnson & Johnson
       Pharmaceuticals regarding intellectual property related to delucemine;
       and

    (*)  nominated a new compound, NPSP156, a D-serine analog, as a candidate
       for preclinical development as a treatment for various neurological
       disorders such as epilepsy and neuropathic pain.
    

    Dr. Coles commented, "Our financial position has led us to evaluate a
number of strategic options for advancing our pipeline.  After many months of
analysis and internal discussion, we have decided that the most prudent way
for us to maximize the value of our pipeline is to focus our own clinical work
on high-value specialty indications, manage the execution of this activity
through contract research organizations and find partners for indications we
can't afford to pursue ourselves."

    
    New Business Plan and Expense Reductions
    
    NPS is taking the following actions to support the development of its
late-stage products and create sustainable long-term value for patients and
shareholders:

    
    (*)  reducing cash burn from $113 million in 2006 to approximately $85 to
       $95 million in 2007 (including restructuring and non-recurring
       expenses) and $35 to $45 million in 2008;

    (*)  reducing current staff from 196 to 35 employees by the end of 2007;
       closing facilities in Salt Lake City and Toronto and consolidating
       operations in New Jersey;

    (*)  executing drug development activities through contract research
       organizations and outsourcing certain discovery and general and
       administrative activities;

    (*)  seeking financial or commercial partners to support the full
       development of our Phase 3 products; and

    (*)  focusing discovery activities on the metabotropic glutamate receptor
       program.
    

    Dr. Coles commented, "I regret that these actions will result in the loss
of employment for many of our colleagues whose contributions are reflected in
the company's enviable record of success in drug discovery.  This includes two
approved products, Sensipar and Preotact, and several promising drug
candidates being developed in partnership with some of the world's leading
pharmaceutical companies.  Ultimately, we believe this new plan is a prudent
way for us to continue to create important new medicines for patients and
value for shareholders."

    
    Pipeline Update
    
    NPS reported progress in advancing its pipeline and provided details
regarding future development plans:

    
    Teduglutide
    (*)  In December 2006, NPS completed patient enrollment and randomization in
       the teduglutide Phase 3 study for treatment of SBS.  The company plans
       to complete the study in the second half of 2007 and prepare a new drug
       application (NDA) for this indication in 2008 if study results are
       positive.

    (*)  NPS is completing a dose-escalating study of teduglutide in healthy
       volunteers to determine appropriate dosing levels of the drug for
       future testing in Crohn's disease and other indications.  The study has
       not yet reached the maximum tolerated dose of teduglutide so the
       company has expanded the trial to obtain this information and
       understand better the drug's full dosing range.

    (*)  In the second half of 2007, under the company's new plan to explore
       high-value specialty indications, NPS will complete animal model proof-
       of-concept studies with teduglutide for the prevention and treatment of
       necrotizing enterocolitis (NEC) and chemotherapy-induced enterocolitis.
       NEC is the most common gastrointestinal emergency occurring in
       neonates, with mortality rates approaching 40 percent in infants who
       weigh less than 1,500 grams, and afflicting more than 12,000 neonatal
       infants annually.  Treatment options are limited to supportive care and
       surgery which can be complicated by short bowel syndrome and
       neurodevelopmental disability.  Chemotherapy-induced enterocolitis is a
       dose-limiting side effect of chemotherapy and afflicts more than
       100,000 cancer patients every year.
    

    Francois Nader, M.D., chief medical and commercial officer of NPS,
stated: "Teduglutide has the potential to be a breakthrough therapeutic option
for the prevention and treatment of NEC and enterocolitis associated with
chemotherapy.  These are important and underserved conditions which fit with
our strategy of focusing on high-value specialty indications.  They are also
logical extensions of teduglutide's mechanism of action and our clinical work
in SBS and Crohn's disease."

    
    PREOS
    (*)  To support U.S. approval of its pending NDA, last year NPS submitted to
       the FDA a Phase 3b protocol for PREOS as a treatment for
       post-menopausal osteoporosis.  After multiple communications with the
       FDA, the company received feedback from the agency this week which NPS
       believes finalizes the protocol design and provides a clear direction
       for completing the development of PREOS in osteoporosis.
       This 12-month bone-mineral density bridging study is designed to
       evaluate the relative efficacy and safety of PTH (100 micrograms every
       other day, 100 micrograms daily, and 75 micrograms daily) versus
       placebo in post-menopausal women with osteoporosis.

    (*)  NPS is supporting a Phase 2 proof-of-concept study initiated by
       Professor John Bilezikian, MD, Columbia University, to explore the use
       of PREOS as a hormone replacement therapy to treat hypoparathyroidism,
       a condition which can result in hypocalcemia, vitamin D deficiency and
       brittle bones.  The study has enrolled 30 of 50 patients who will
       receive PREOS every other day for 24 months.  NPS will use this study
       to determine whether to develop PREOS as a novel treatment for
       hypoparathyroidism.

    Preotact(R) (full-length parathyroid hormone [PTH 1-84])
    (*)  NPS partner Nycomed, Inc. has now launched Preotact (European brand
       name for PREOS) successfully in Germany, the United Kingdom, Spain,
       Italy and other European markets.  Nycomed expects to complete the
       drug's launch throughout the European Union this year.

    Cinacalcet HCl
    (*)  In February 2007, NPS partner Amgen, Inc. reported 2006 Sensipar(R)
       (cinacalcet HCl) sales of $321.8 million, approximately 100% higher
       than 2005 sales of $157.4 million.  This growth creates additional
       value and financial flexibility for NPS since the company will retain
       the full value of its royalties on Sensipar sales once its Sensipar
       debt is paid down, currently projected to occur in 2011.

    (*)  In February 2006, NPS partner Kirin Brewery sought clearance to market
       cinacalcet HCl in Japan.

    Calcilytics
    (*)  In December 2006, GlaxoSmithKline (GSK) paid NPS $3 million to include
       new backup compounds discovered by NPS in their ongoing collaboration
       to develop and commercialize orally active calcilytic compounds.  NPS
       is now eligible to receive additional milestone payments from GSK and
       retains rights to co-promote in North America.

    (*)  GSK plans to begin Phase 2 clinical studies with the lead calcilytic
       compound, SB-751689, in the second quarter of 2007.

    mGluRs
    (*)  NPS collaborator AstraZeneca (AZ) is continuing to conduct Phase 1
       clinical studies with compounds active at metabotropic glutamate
       receptors for a variety of potential central nervous system and
       gastrointestinal indications.  NPS and AZ scientists have been
       conducting discovery research to find new compounds under this
       collaboration.

    Board Update
     (*)  Consistent with its new business plan and smaller size, the company
        plans to reduce the size of its board of directors from 10 to 7
        directors.

     (*)  Current directors Santo Costa, Hunter Jackson, and Joseph "Skip" Klein
        have announced that they do not intend to stand for reelection to the
        board at the company's annual meeting in May.
    

    NPS lead director Peter Tombros stated, "On behalf of the entire board, I
extend our deepest thanks to company founder Hunter Jackson and long-time
directors Sandy Costa and Skip Klein for their many years of service and
outstanding contributions to the company.  Hunter leaves a legacy of
productive drug discovery and we wish him, Sandy and Skip the best of luck in
their future endeavors."

    
    2007 Milestones
    
    NPS is committed to maximizing the clinical and commercial potential of
its late-stage products and plans to pursue the following corporate and drug
development objectives in 2007:

    
    (*)  Complete the clinical development program for teduglutide in SBS in
       preparation for U.S. and E.U. regulatory filings in 2008;

    (*)  Explore the development of PREOS and teduglutide in at least one new
       indication for each compound;

    (*)  Secure financial or commercial partners to help advance its Phase 3
       programs;

    (*)  Monetize non-core assets to generate cash;

    (*)  Reduce cash burn to approximately $85 to $95 million in 2007 (including
       restructuring and non-recurring expenses) and $35 to $45 million in
       2008; and

    (*)  Address the company's 2008 convertible debt.

    Fourth Quarter 2006 Financial Results
    

    NPS incurred a net loss for the fourth quarter of 2006 of $14.0 million,
or $0.30 per share, compared to a net loss in the fourth quarter of 2005 of
$44.3 million, or $0.96 per share.  For the year ended December 31, 2006, the
net loss was $112.7 million, or $2.43 per share, compared to $169.7 million,
or $4.14 per share for the year ended December 31, 2005.
    Revenues for the fourth quarter of 2006 were $24.1 million compared to
revenues of $4.3 million for the same period of 2005, and $48.5 million for
the year ended December 31, 2006 compared to $12.8 million for the same period
in 2005.  The increase in revenues for the three months ended December 31,
2006 as compared with the same period in 2005 is primarily the result of
increased royalty revenue earned from Amgen on sales of cinacalcet HCl,
increased product sales, royalty and milestone revenue from Nycomed on sales
of Preotact, and up-front fees and payments earned on new and amended
agreements.
    Research and development expenses were $13.3 million for the fourth
quarter of 2006 compared to $29.2 million for the same period of 2005, and
$68.4 million for the year ended December 31, 2006 compared to $117.4 million
for the same period in 2005.  The decrease in research and development
expenses during the three months ended December 31, 2006 compared with the
same period in the prior year is primarily due to decreases in the development
and manufacturing costs for PREOS and teduglutide.
    Selling, general and administrative expenses were $9.8 million for the
fourth quarter of 2006 compared to $15.7 million for the same period in 2005.
For the year ended December 31, 2006, selling, general and administrative
expenses were $52.2 million compared to $48.6 million for the same period in
2005.  The decrease in selling, general and administrative expenses during the
three months ended December 31, 2006 as compared with the same period in the
prior year is primarily due to decreases in market research, educational and
commercial activities associated with PREOS and no sales promotion efforts
around Kineret(R), a biologic therapy owned by Amgen, and Restasis(R), an
ophthalmic product owned by Allergan in the fourth quarter of 2006.
    Restructuring charges were a credit of $61,000 for the fourth quarter of
2006 and $8.2 million for the year ended December 31, 2006 compared to zero
for the same periods in 2005.  The restructuring charges relate to the
initiative to restructure operations announced June 12, 2006.
    Write down on long-lived assets was $8.3 million for the fourth quarter
and year ended December 31, 2006. An evaluation of alternative courses of
action that were finalized with the 2007 decision to close the Toronto, Canada
and Salt Lake City, Utah sites resulted in the fair value of property and
equipment located in Toronto, Canada exceeding its carrying value.
    As of December 31, 2006, the company had 46.2 million shares outstanding
and $146.2 million in cash, cash equivalents, and marketable investment
securities as compared to $259.0 million at December 31, 2005.
    Due to planned decreases in spending in future periods, NPS anticipates
its current cash, cash equivalent and marketable investment security balance
will be sufficient to fund operations for the next two years and that it will
have a 2007 year-end cash balance of between $50.0 million and $60.0 million.
The decrease in cash burn, combined with the potential to monetize non-core
assets, puts NPS in an improved position to fund its late-stage assets and
address its outstanding 2008 debt obligations.



    NPS PHARMACEUTICALS, INC. AND SUBSIDIARIES

    
               Condensed Consolidated Statements of Operations
                    (In thousands, except per share data)
                                 (Unaudited)

                             Three Months Ended           Year Ended
                                December 31,              December 31,
                             2006         2005         2006         2005
    Revenues               $24,066       $4,308      $48,502      $12,825

    Operating
     expenses (benefit):
      Cost of goods sold       511           --        1,413           --
      Cost of royalties       1026          349        2,980        1,144
      Research and
       development          13,319       29,238       68,395      117,445
      Selling, general
       and administrative    9,772       15,691       52,177       48,635
      Restructuring
       charges                (61)           --        8,179           --
      Write down of
       long-lived assets     8,297           --        8,297           --
        Total operating
         expenses           32,864       45,278      141,441      167,224

        Operating loss      (8,798)     (40,970)     (92,939)    (154,399)

    Other expense, net      (5,187)      (3,318)     (19,729)     (15,379)
        Loss before
         income tax
         benefit           (13,985)     (44,288)    (112,668)    (169,778)

    Income tax benefit          --          (10)          --          (55)

        Net loss          $(13,985)    $(44,278)   $(112,668)   $(169,723)


    Basic and diluted
     net loss per
     common and potential
     common share           $(0.30)      $(0.96)      $(2.43)      $(4.14)

    Weighted average
     common and
     potential common
     shares outstanding
     - basic and diluted    46,507       46,121       46,374       41,036



                  NPS PHARMACEUTICALS, INC. AND SUBSIDIARIES

                    Condensed Consolidated Balance Sheets
                                (In thousands)
                                 (Unaudited)

                                                   December 31,   December 31,
                                                      2006           2005
    Cash, cash equivalents and marketable
     investment securities                          $146,152       $258,967
    Current restricted cash and cash equivalents      21,921          6,095
    Account receivable                                15,534          4,281
    Other current assets                               6,082          3,023
    Restricted cash and cash equivalents                  --          8,437
    Plant and equipment, net of accumulated
     depreciation and amortization                    19,849         32,960
    Debt issuance costs                                5,569          7,525
    Other assets, net of accumulated amortization      9,633          9,764
      Total assets                                  $224,740       $331,052

    Liabilities and Stockholders' Equity (Deficit)
    Current liabilities                              $44,467        $38,459
    Notes payable and other liabilities              373,517        390,117
        Total liabilities                            417,984        428,576

    Paid-in capital and common stock                 677,520        664,088
    Deferred compensation                                 --         (3,120)
    Accumulated other comprehensive loss              (1,892)        (2,288)
    Accumulated deficit                             (868,872)      (756,204)
      Net stockholders' deficit                     (193,244)       (97,524)
      Total liabilities and stockholders' deficit   $224,740       $331,052



                          About NPS Pharmaceuticals
    

    NPS discovers and develops small molecules and recombinant proteins as
drugs, primarily for the treatment of metabolic, bone and mineral, and central
nervous system disorders.  The company has drug candidates in various stages
of clinical development backed by a strong discovery research effort.
Additional information is available on the company's website,
http://www.npsp.com.

    Conference Call Information

    A conference call will be held today at 3:00 p.m. EDT.  To participate in
the call, dial (866) 543-6407 with passcode 77355692.  International callers
may dial (617) 213-8898 using the same passcode.  In addition, live audio of
the conference call will be simultaneously broadcast over the Internet and may
be accessed on the company's home page, (www.npsp.com).  A conference call
replay will be available until March 21, 2006 at (888) 286-8010, or (617)
801-6888 for international callers, with passcode 59938894.  The webcast will
be available for replay and iPod(R) download for the same period of time.

    
     Cautionary Statement For The Purpose Of The "Safe Harbor" Provisions
           Of The Private Securities Litigation Reform Act of 1995
    

    Note: Statements made in this press release, which are not historical in
nature, constitute forward-looking statements for purposes of the safe harbor
provided by the Private Securities Litigation Reform Act of 1995. Such
statements include those regarding: implementation of our new business plan to
transition the company to an outsourcing model; reducing our cash burn for
2007 and 2008; securing a commercial or financial partner for PREOS and
teduglutide; receipt of the FDA's acceptance of our proposed protocol for a
phase 3b clinical trial for PREOS; completion of the ongoing clinical trials
with teduglutide in 2007 and the submission of an NDA for teduglutide in 2008;
exploration of PREOS and teduglutide for additional indications; and our
partners' continued advancement of our partnered programs and drug candidates.
These statements are based on management's current expectations and beliefs
and are subject to a number of factors and uncertainties that could cause
actual results to differ materially from those described in the forward-
looking statements.  Such risks and uncertainties include: we may not be
successful in implementing or carrying out our new business plan or reducing
our cash burn for future periods; we may not be able to secure a commercial or
financial partner for PREOS or teduglutide; even if we are able to secure a
partner for PREOS or teduglutide, the terms of the partnership or funding may
not be favorable to us; the FDA may not accept our proposed phase 3b protocol
for PREOS and the regulatory approval process for PREOS may be further
delayed; if the FDA approves our phase 3b protocol, we may not have the
resources to initiate and complete the phase 3b clinical trial for PREOS, we
may not be able to enroll patients in the trial in a timely manner, and the
data resulting from the trial may not support regulatory approval of PREOS;
our ongoing clinical trials for teduglutide may not be completed in a timely
manner, which would delay the clinical advancement and regulatory approval of
teduglutide; the data from our clinical trials with teduglutide may not be
positive or ultimately support the filing of an NDA for teduglutide; our data
and exploratory findings may not support advancing PREOS or teduglutide in
other indications; we may not be successful in securing alternatives to
address our convertible debt; we may never develop additional products that
generate revenues; the FDA may delay approval or may not approve any of our
product candidates; our current collaborators or partners may not devote
adequate resources to the development and commercialization of our licensed
drug candidates which would prevent or delay introduction of drug candidates
to the market; and, we may not have or be able to secure sufficient capital to
fund our operations and the development and commercialization of our product
candidates.  All information in this press release is as of March 14, 2007,
and we undertake no duty to update this information. A more complete
description of these risks can be found in our filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K for the year
ended December 31, 2006.

    Sensipar(R) is a trademark owned by Amgen.  Restasis(R) is a trademark
owned by Allergan.





For further information:

For further information: Brandi Simpson, Sr. Director, Investor
Relations  of NPS Pharmaceuticals, Inc., +1-801-583-4939, bsimpson@npsp.com
Web Site: http://www.npsp.com

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NPS PHARMACEUTICALS, INC.

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