NPS Pharmaceuticals Drug for Rare Bowel Condition Meets Goals, Shares Rise

NPS Pharmaceuticals Inc. said its experimental therapy, Gattex, helped restore normal intestinal function in patients with a rare bowel condition in a study, spurring shares to the biggest gain in about 11 years.

NPS increased $2.39, or 31 percent, to $10 at 4 p.m. New York time in Nasdaq Stock Market composite trading. It was the stock’s largest one-day percentage jump since Feb. 17, 2000. The shares have almost tripled in the past 12 months.

If approved by U.S. regulators, the injectable drug may reach sales of $259 million by 2016, George Farmer, an analyst at Canaccord Genuity, wrote in a Jan. 19 note. The study found that 63 percent of adults with short bowel syndrome given Gattex reduced their need for intravenous nutrient therapy, compared with 30 percent on a placebo, NPS said today in a statement. The condition develops when sections of the small intestine are removed, inhibiting absorption of nutrients in food.

“We are building the case for the value that Gattex can bring,” Francois Nader, chief executive officer of NPS, said in a telephone interview.

About 15,000 people in the U.S. have severe cases of the syndrome that require them to be fed through their veins at least three days a week, Nader said.

The study of 86 patients was the last of three stages of testing typically needed to gain U.S. regulatory approval.

Filing for Approval

NPS, based in Bedminster, New Jersey, said it plans to file for U.S. approval in the second half of 2011. Nycomed A/S, based in Zurich, has marketing rights to Gattex outside North America and plans to seek approval in Europe in the first quarter of 2011, Nader said.

The goal of the 24-week study was a 20 percent or greater reduction in the need for patients to be fed through their veins. Many patients with severe short bowel syndrome must get feedings five or six days a week, often for 12 hours a day, at a cost of more than $100,000 annually, Nader said.

Although no pricing has been set for Gattex, Nader said it will likely be more than the $65,000 per patient per year estimated by Canaccord’s Farmer in the Jan. 19 note.

The drug may reduce the frequency and cost of intravenous feedings, lower side effects and improve quality of life, Nader said. Further studies may show that some patients improve enough to come off the intravenous feedings entirely, he said.

Serious Complications

Patients with the bowel syndrome who receive intravenous fluids and nutrients “are prone to a number of serious complications, including life-threatening infections, blood clots and liver and kidney damage,” Palle Bekker Jeppesen, a gastroenterologist at Rigshospitalet-Copenhagen University Hospital in Denmark who was involved in the study, said in the company’s statement.

NPS will release more details of the study at a medical meeting in March, Nader said.

NPS reported revenue of $21 million for its third quarter ended in September, most of it royalty income from Sensipar, a drug sold by Thousand Oaks, California-based Amgen Inc. that is used to treat complications of kidney disease. Amgen reported Sensipar sales of $714 million in 2010.

To contact the reporter on this story: David Olmos in San Francisco at dolmos@bloomberg.net.

To contact the editor responsible for this story: Reg Gale at Rgale5@bloomberg.net

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