NPS Pharmaceuticals Reports 2007 Financial Results



    
    Conference call scheduled for 5:00 pm ET today
    

    BEDMINSTER, N.J., March 13 /CNW/ -- NPS Pharmaceuticals, Inc. (Nasdaq:  
NPSP) today reported 2007 financial results and accomplishments that reflected
the implementation of a new strategy to develop the company's late-stage
product candidates in specialty indications for gastrointestinal and endocrine
disorders with high unmet medical need.
    In line with its new business plan, during 2007 NPS retired a substantial
amount of its debt and significantly reduced operating expenditures.  In 2007,
the company raised more than $275.0 million of capital and retired $191.0
million in convertible debt due in 2008.  The company's cash, cash
equivalents, short- and long-term investments totaled $161.7 million as of
December 31, 2007.  NPS now expects its 2008 cash burn to be in the range of
$45 to $55 million.  The increase in the company's 2008 cash burn from
previous guidance is principally due to the timing of payments of certain 2007
expenses, which are now projected to occur in 2008.
    For the fourth quarter of 2007, NPS reported net income of $21.2 million,
or $0.39 per diluted share, versus a net loss of $14.0 million, or $0.30 per
diluted share, for the fourth quarter of 2006.  For the year ended December
31, 2007, NPS reported a net loss of $657,000 or $0.01 per diluted share, as
compared to a net loss of $112.7 million or $2.43 per diluted share for 2006. 
NPS's improved 2007 financial results were primarily due to (i) a $30.0
million gain related to the sale of its interests in an early-stage research
and development collaboration, (ii) declines in operating expenditures, and
(iii) increased milestone and royalty revenues.
    Tony Coles, M.D., president and chief executive officer of NPS, stated:
"After implementing a new business plan in 2007, raising significant capital
and obtaining regulatory clarity from the FDA, NPS now has the direction, the
resources, and the capabilities to develop its products in specialty
indications with high unmet medical needs, including short bowel syndrome and
hypoparathyroidism.  With a two to three year cash runway, I am confident that
NPS is well-positioned to advance its pipeline and achieve commercial
success."

    2007 Accomplishments

    During 2007, NPS reported the following accomplishments:

    
    -- Refocused its business on specialty indications for gastrointestinal
       and endocrine disorders with high unmet medical need
    -- Raised more than $275.0 million through the issuance of royalty-backed
       and convertible notes and the monetization of non-core assets
    -- Achieved net operating cash inflow of $27.6 million for 2007 as
       compared to a net operating cash outflow of $103.9 for 2006
    -- Retired $191.0 million in convertible debt due in 2008
    -- Completed a Phase 3 study of GATTEX(TM) (teduglutide)  in short bowel
       syndrome (SBS) patients who are dependent on parenteral nutrition (PN)
    -- Secured an ex-North America partnership for GATTEX with Nycomed
    -- Defined a clinical strategy and obtained orphan drug status for NPSP558
       (parathyroid hormone 1-84 [rDNA origin injection]) as a potential
       therapy for hypoparathyroidism
    
    Francois Nader, M.D., chief executive officer-elect, stated: "We are
committed to executing an ambitious clinical program in 2008.  The top-line
results from our Phase 3 extension study of GATTEX in patients with short
bowel syndrome support our plans to initiate a confirmatory Phase 3 study of
GATTEX in this indication in the third quarter of this year.  We also expect
to launch a pivotal trial for our PTH 1-84 compound, NPSP558, in patients with
hypoparathyroidism.  Both programs represent important new opportunities for
us to create significant and lasting value for patients and shareholders.  In
addition, our royalty-based pipeline continues to make notable progress. Kirin
launched REGPARA in Japan this quarter and we expect to begin receiving
royalties in the second half of the year.  We will also continue to work with
Nycomed to support their regulatory strategy for GATTEX in Europe."
    
    2007 Financial Results
    Revenues
    
    Revenues grew to $34.0 million for the fourth quarter of 2007, as
compared to $24.1 million for the fourth quarter of 2006.  For the full year,
revenues increased by $37.7 million to $86.2 million for 2007 as compared to
$48.5 million for 2006. The increased revenues were primarily due to (i)
revenues associated with the company's agreement with Nycomed for Preotact(R)
(parathyroid hormone [rDNA origin] injection), (ii) increased royalty revenue
on Amgen's sales of Sensipar(R) (cinacalcet HCl), and (iii) licensing fees
recognized under the company's agreement with Nycomed for GATTEX.
    Sensipar royalties are paid directly to a subsidiary of NPS and used to
secure non-recourse debt issued in August 2007 and December 2004.  After
repayment of the debt, Sensipar royalties will return to NPS.
    In July 2007, DRI Capital (previously Drug Royalty LP2) purchased NPS's
rights to receive future royalty payments from Nycomed's sale of Preotact in
Europe for $50 million, with an additional $25.0 million due in 2010 if
certain Preotact sales thresholds are achieved.  Royalties will return to NPS
if royalty payments to DRI exceed two and one-half times the amount of
principal advanced.
    
    Research and Development
    
    Research and development expenses were $10.6 million for the fourth
quarter of 2007 versus $13.3 million for the fourth quarter of 2006.  Full
year research and development expenses were $38.7 million for 2007 as compared
to $68.4 million for 2006.  The reduction in research and development expenses
during 2007 was attributable to the implementation of the company's new
business plan and the corresponding reprioritization of its pipeline to focus
on specialty indications with high unmet medical need.
    
    General and Administrative
    
    NPS's fourth quarter general and administrative expenses were $9.3
million versus $9.8 million for the fourth quarter of 2006.  Full-year general
and administrative expenses were $27.0 million for 2007 as compared to $52.2
million for 2006.  The declines in general and administrative expenses were
attributable to reductions in personnel and associated expenditures due to the
implementation of the company's new business plan.
    
    Restructuring Charges
    
    NPS reported restructuring chares of $1.1 million for the fourth quarter
of 2007 as compared to a $61,000 credit for the fourth quarter of 2006.  For
the full year, restructuring charges for 2007 were $13.4 million versus $8.2
million in 2006.  Restructuring charges were primarily comprised of employee
termination benefits.
    
    Gain on sale of asset
    
    In connection with the implementation of NPS's new business plan, the
company sold its interests in an early-stage research and development
collaboration with AstraZeneca for metabotropic glutamate receptors (mGluRs)
and recognized a $30.0 million gain in the fourth quarter of 2007.
    
    Cash and Investments
    
    As of December 31, 2007, the company's cash, cash equivalents, short- and
long-term investments totaled $161.7 million, as compared to $146.2 million as
of December 31, 2006.
    The company's investment portfolio includes investments in certain
auction-rate securities or ARS investments.  As of December 31, 2007, the
company's ARS investments had an estimated value of $53.3 million and a cost
basis of $59.8 million.
    Recently, NPS agreed to sell certain of these ARS investments to one of
its investment advisors for $26.0 million.  These securities had an estimated
market value of $24.9 million at December 31, 2007.  In connection with the
agreement to sell these investments, NPS recorded an other-than-temporary loss
of $4.1 million in the fourth quarter of 2007 to reflect the difference
between the selling price of $26.0 million and the cost basis of $30.1
million.
    The estimated value of NPS's remaining ARS investments totaled $28.4
million at December 31, 2007, which reflects a $1.3 million reduction in the
principal value of $29.7 million.  These ARS investments are all AAA rated and
NPS believes the declines are temporary in nature.  Accordingly the decrease
in the estimated market value was recorded in the accumulated other
comprehensive loss section of the company's balance sheet.  In addition,
because the auctions associated with these ARS investments have been
unsuccessful for the past several months, these ARS investments were
reclassified to non-current assets during the fourth quarter of 2007.
Excluding the ARS investments the company is selling, as of February 29, 2008,
the estimated value of the remaining ARS investments was $26.4 million.
    
    Conference Call Information
    
    NPS will host a conference call beginning today at 5:00 pm Eastern Time.
To participate in the conference call, dial (866)510-0708 and use pass code
19613979.  International callers may dial (617)597-5377, 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, http://www.npsp.com.
    For those unable to participate in the live call, a replay will be
available at (888) 286-8010, with pass code 39947050, until midnight Eastern
Time, March 28, 2008.  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.
    
    About NPS Pharmaceuticals
    
    NPS Pharmaceuticals is developing specialty therapeutics for
gastrointestinal and endocrine disorders with high unmet medical need.  The
company is currently advancing two late-stage programs:  GATTEX(TM)
(teduglutide) is in Phase 3 clinical development for intestinal failure
associated with short bowel syndrome and NPSP558 (parathyroid hormone 1-84
[rDNA origin] injection) is in Phase 2 clinical development as a hormone
therapy for hypoparathyroidism.  NPS has also completed a Phase 3 osteoporosis
study for PREOS(R) (parathyroid hormone 1-84 [rDNA origin] injection).  NPS
complements its internal programs with strategic partnerships with Amgen,
GlaxoSmithKline, Kirin, and Nycomed.  Additional information is available at
http://www.npsp.com.
    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. These
statements are based on the company'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. Risks associated to NPS's business include, but are not limited
to, the risk of successfully executing its preclinical and clinical studies
and gaining marketing approvals for GATTEX and NPSP558, the risks associated
with the company's auction-rate securities, the risk that the steps NPS has
taken or is taking to address the material weakness will be adequate or that
future material weaknesses or control deficiencies will be identified, as well
as other factors expressed in NPS's periodic filings with the U.S. Securities
and Exchange Commission, including its Annual Report on Form 10-K and Form
10-Qs. All information in this press release is as of the date of this release
and NPS undertakes no duty to update this information.

    (Financial statements to follow)



    
                  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,
                                2007         2006         2007         2006
    

    Revenues                   $33,981      $24,066      $86,248      $48,502


    
    Costs and expenses:
      Cost of goods sold         3,305          511        6,180        1,413
      Cost of royalties          1,297        1,026        4,659        2,980
      Cost of license fees       1,547           --        1,547           --
      Research and
       development              10,603       13,333       38,723       68,411
      General and
       administrative            9,331        9,772       26,998       52,177
      Restructuring charges      1,133          (61)      13,386        8,179
        Total operating
         expenses               27,216       24,581       91,493      133,160
      Other operating (gains)
       and losses, net         (29,925)       8,297      (38,210)       8,297
    

    
        Operating income
         (loss)                 36,690       (8,812)      32,965      (92,955)
    


    Other expense, net       (14,631)      (5,173)     (32,768)     (19,713)

    
        Income (loss) before
         income tax expense     22,059      (13,985)         197     (112,668)
    


    Income tax expense           854           --          854           --

    Net income (loss)      $21,205     ($13,985)       ($657)   ($112,668)


    
    Net income (loss) per
     common and potential
     common share:
          Basic                  $0.45       ($0.30)      ($0.01)      ($2.43)
    

    Diluted                $0.39       ($0.30)      ($0.01)      ($2.43)

    
    Weighted average common
     and potential common
     share:
          Basic                 47,026       46,507       46,804       46,374
    

    Diluted               57,253       46,507       46,804       46,374




    
                  NPS PHARMACEUTICALS, INC. AND SUBSIDIARIES
                    Condensed Consolidated Balance Sheets
                                (In thousands)
                                 (Unaudited)
                                                   December 31,   December 31,
                                                      2007           2006
    Assets:
      Cash, cash equivalents and marketable
       investment securities                        $133,331       $146,152
      Current restricted cash and cash equivalents    24,560         21,921
      Account receivable                              19,518         15,534
      Other current assets                             7,676          6,082
      Plant and equipment, net of accumulated
       depreciation and amortization                     309         19,849
      Marketable investment securities, less current
       portion                                        28,357             --
      Debt issuance costs                              6,918          5,569
      Other assets, net of accumulated amortization   11,088          9,633
        Total assets                                $231,757       $224,740
    

    
    Liabilities and Stockholders' Deficit:
      Current liabilities                            $78,443        $44,467
      Convertible notes                               50,000        192,000
      Secured notes payable(*)                         286,357        154,690
      Other liabilities                                4,988         26,827
        Total liabilities                            419,788        417,984
    

    
    Paid-in capital and common stock                 684,002        677,520
    Accumulated other comprehensive loss              (2,504)        (1,892)
    Accumulated deficit                             (869,529)      (868,872)
      Total stockholders' deficit                   (188,031)      (193,244)
      Total liabilities and stockholders' deficit   $231,757       $224,740
    

    (*) Non-recourse debt secured by Sensipar(R) and Preotact(R) royalty
revenue




For further information:

For further information: Susan Mesco of NPS Pharmaceuticals, Inc., 
+1-908-450-5516, smesco@npsp.com Web Site: http://www.npsp.com

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NPS PHARMACEUTICALS, INC.

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