NPS Gattex Wins Approval for Short-Bowel Syndrome
NPS Pharmaceuticals Inc. (NPSP)’s Gattex, a maker of rare-disease drugs, won U.S. approval as a treatment for patients with short-bowel syndrome to help absorb nutrients.
The Food and Drug Administration cleared the drug known chemically as teduglutide while requiring a study of at least 10 years of potential side effects, the agency said today in a statement. Gattex helps wean patients off a time-consuming intravenous nutrition program.
NPS, which reported about $101 million in 2011 revenue last year, may see peak annual sales from Gattex reach $350 million, Francois Nader, the company’s chief executive officer, said in an October interview. The drug, expected to go on sale by March, is the first major product that the company will market on its own, said David Nierengarten, a Wedbush Securities Inc. analyst in Los Angeles.
“The launch expectations are modest enough that I think the drug could exceed them,” Nierengarten said in a phone interview. “It’s an execution story now. They need to launch this drug and show they can be a commercial company.”
NPS gained less than 1 percent to $9.10 at the close in New York. The shares of the Bedminster, New Jersey-based drugmaker have climbed 38 percent this year.
Gattex may increase the risk of developing cancer, polyps and intestinal blockages, the FDA said in its statement. The agency will require NPS to develop a “risk evaluation and mitigation strategy” for the drug that includes a communication plan and training for those prescribing it.
The warning and the 10-year study initially worried some investors, helping drive NPS shares down as much as 8.1 percent today before they rebounded, Nierengarten said. The drop was an overreaction, and the extra requirements and warnings were expected, he said.
Gattex may generate sales of $21.6 million in 2013, with the potential to reach $250 million, Nierengarten said.
NPS shares the rights to sell the drug in Europe with Takeda Pharmaceutical Co. (4502), based in Osaka, Japan. NPS plans to sell Gattex on its own in the U.S., Nader said. The company will have a sales team of about 30 people who will target 6,000 physicians who have experience with the disease, Eric Pauwels, chief commercial officer, said in an earnings call last month.
“The approval of Gattex is a crowning achievement for our company and the catalyst for our transformation into a premier orphan drug business,” Nader said today in a company statement.
The drug is meant to increase the ability of short-bowel syndrome patients to absorb nutrients and replace intravenous nutritional support given 10 to 12 hours each day.
Short-bowel syndrome is the result of conditions such as Crohn’s disease or trauma that requires much of the small intestine to be removed, causing a reduced ability to absorb water and nutrients.
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