UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
November
3, 2011
Date
of Report (Date of earliest event reported)
NPS PHARMACEUTICALS, INC. |
(Exact name of registrant as specified in its charter) |
Delaware |
0-23272 |
87-0439579 |
(State or other jurisdiction of |
(Commission File Number)
|
(I.R.S. Employer Identification Number) |
550 Hills Drive, 3rd Floor |
Bedminster, NJ 07921 |
(Address of principal executive offices) |
(908) 450-5300 |
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(Registrant’s telephone number, including area code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. Results of Operations and Financial Condition.
On November 3, 2011, NPS Pharmaceuticals, Inc. issued a press release announcing its operating results for the third quarter of 2011. The text of the press release is furnished as Exhibit 99.1 to this Form 8-K.
The information in Item 2.02 of this Form 8-K and the Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
Description |
|
99.1 |
Press Release issued by NPS Pharmaceuticals, Inc. on November 3, 2011. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: |
November 3, 2011 |
NPS PHARMACEUTICALS, INC. |
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By: |
/s/ EDWARD STRATEMEIER |
Edward Stratemeier |
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Senior Vice President, General Counsel and |
EXHIBIT INDEX
Exhibit Number
|
Description
|
|
99.1 |
Press Release issued by NPS Pharmaceuticals, Inc. on November 3, 2011. |
Exhibit 99.1
NPS Pharmaceuticals Reports Third Quarter 2011 Financial Results and Improves Cash Burn Guidance
-- Company expects to end 2011 with at least $160 million in cash and investments --
-- Two product registration programs on track with stated timelines; upcoming milestones include reporting top-line Phase 3 data for NPSP558 and submitting New Drug Application for GATTEX® --
-- Conference call today at 8:30 AM ET --
BEDMINSTER, N.J.--(BUSINESS WIRE)--November 3, 2011--NPS Pharmaceuticals, Inc. (NASDAQ: NPSP), a specialty pharmaceutical company developing orphan therapeutics for rare gastrointestinal and endocrine disorders, today reported its third quarter 2011 financial results.
NPS reported a net loss of $12.3 million or $0.14 per diluted share for the third quarter 2011, compared to a net loss of $15.7 million or $0.26 per diluted share for the third quarter 2010. Cash and investments totaled $189.6 million at September 30, 2011, compared with $133.8 million at December 31, 2010.
“This is an exciting time for NPS as we prepare to deliver two key milestones before the end of this year -- reporting top-line data from our REPLACE study for NPSP558 in hypoparathyroidism and submitting the remaining sections of our New Drug Application (NDA) for GATTEX in short bowel syndrome,” said Francois Nader, MD, president and chief executive officer of NPS Pharmaceuticals, Inc. “We are also pleased that we added two early clinical-stage calcilytic compounds to our pipeline -- NPSP790 and NPSP795 -- and we are eager to assess their potential in rare endocrine disorders like ADHH.”
Pipeline and other business highlights
GATTEX® (teduglutide) in short bowel syndrome
NPSP558 (rhPTH (1-84)) in hypoparathyroidism
Other business highlights
Financial results
Royalties
Royalty revenues were $24.5 million for the third quarter 2011, compared with $21.0 million for the third quarter 2010. NPS earns royalties on (i) Amgen’s sales of Sensipar/Mimpara (cinacalcet HCl), (ii) Nycomed’s sales of Preotact® (recombinant parathyroid hormone 1-84 [rDNA origin] injection), (iii) Kyowa Hakko Kirin’s sales of REGPARA® (cinacalcet HCl), and (iv) Ortho-McNeil’s sales of Nucynta® (tapentadol).
The components of royalties are summarized as follows:
In millions |
||||||||||
Third quarter | ||||||||||
2011 | 2010 | |||||||||
Royalty: | ||||||||||
Sensipar/Mimpara | $19.8 | $17.1 | ||||||||
Preotact | 2.1 | 2.1 | ||||||||
REGPARA | 2.0 | 1.5 | ||||||||
Nucynta | 0.6 | 0.3 | ||||||||
Total | $24.5 | $21.0 |
The company’s royalty rights related to Sensipar/Mimpara, Preotact, and REGPARA have been partially monetized and classified as non-recourse debt. After repayment of the obligations, as set forth in the agreements, any remaining cash flows from these royalties will return to NPS.
Research and development
Research and development expenses were $20.2 million for the third quarter 2011, compared with $19.4 million for the third quarter 2010. The increase in research and development expense was due to the advancement of the company’s short bowel syndrome and hypoparathyroidism product registration programs.
General and administrative
General and administrative expenses were $6.4 million for the third quarter 2011, compared with $5.4 million for the third quarter 2010. The increase was due to costs related to commercial-readiness activities.
Interest expense
Third quarter interest expense was $10.6 million and $10.7 for 2011 and 2010, respectively. Interest expense is largely attributable to non-recourse debt secured by the company’s Sensipar/Mimpara, Preotact, and REGPARA royalties.
Cash and investments
At September 30, 2011, the company’s cash, cash equivalents, and marketable investment securities totaled $190 million, compared with $134 million at December 31, 2010. In April 2011, the company completed a public offering of its common stock for estimated net proceeds of approximately $107 million after deducting underwriting discounts and other offering expenses.
Cash burn
The company’s net cash burn was $62 million for the first nine months of 2011. NPS now expects its 2011 cash burn to be in the range of $85 to $92 million, versus previous guidance of $85 to $100 million. The company’s cash burn is defined as the net change in cash, cash equivalents, and marketable investment securities, excluding proceeds from external financing activities.
Cash burn is a non-GAAP financial measure that may be considered in addition to results prepared in accordance with U.S. generally accepted accounting principles (GAAP). This non-GAAP measure should not be considered a substitute for, or superior to, GAAP results. NPS believes that cash burn is relevant and useful information for the company and its investors as it provides a meaningful way of determining cash available for and net cash used in operations of the company.
Long-term debt
At September 30, 2011, the company’s only recourse debt was $16.5 million in 5.75% convertible notes due in 2014.
The other debt on the company’s balance sheet is non-recourse to the company and solely secured by its royalty rights related to Sensipar/Mimpara, Preotact, and REGPARA. After repayment of the obligations, as set forth in the agreements, the cash flows from the royalties will return to NPS.
The following table reflects the carrying value of the company’s non-recourse debt at September 30, 2011 and December 31, 2010:
In millions |
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09/30/11 | 12/31/10 | |||||||
Non-recourse debt: | ||||||||
Sensipar/Mimpara-secured | $145.0 | $213.9 | ||||||
Preotact-secured | 48.7 | 50.0 | ||||||
REGPARA-secured | 36.3 | 36.3 | ||||||
Total non-recourse debt | 230.0 | 300.2 | ||||||
Less current portion | 18.5 | 55.8 | ||||||
Total long-term non-recourse debt | $211.5 | $244.4 |
Conference call information
NPS will host a conference call beginning today at 8:30 a.m. Eastern Time. To participate in the conference call, dial (800) 591-6942 and use pass code 90932478. International callers may dial (617) 614-4909, 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 91483368, until midnight Eastern Time, November 17, 2011. 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 an outsourcing-based development company focused on bringing biopharmaceuticals to patients with rare disorders and few, if any, therapeutic options. The company is advancing two Phase 3 registration programs, GATTEX® (teduglutide) in adult short bowel syndrome (SBS) and NPSP558 (parathyroid hormone 1-84 [rDNA origin] injection) in hypoparathyroidism. NPS’ earlier stage pipeline includes two calcilytic compounds, NPSP790 and NPSP795, with potential application in rare disorders involving increased calcium receptor activity, such as autosomal dominant hypocalcemia with hypercalciuria (ADHH). NPS complements its proprietary programs with a royalty-based portfolio of products and product candidates that includes agreements with Amgen, GlaxoSmithKline, Kyowa Hakko Kirin, Nycomed, and Ortho-McNeil Pharmaceutical.
“NPS”, “NPS Pharmaceuticals”, and “GATTEX” are the company’s registered trademarks. All other trademarks, trade names or service marks appearing in this press release are the property of their respective owners.
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 the company’s business include, but are not limited to, the risks associated with any failure by the company to successfully complete its preclinical and clinical studies within the projected time frames or not at all, the risk of not gaining marketing approvals for GATTEX and NPSP558, the risks associated with the company’s strategy, as well as other risk factors described in the company’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.
NPS PHARMACEUTICALS, INC. AND SUBSIDIARIES |
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Condensed Consolidated Statements of Operations |
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(In thousands, except per share data) |
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(Unaudited) |
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Three Months Ended | ||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
Revenues: | ||||||||
Royalties | $ | 24,483 | $ | 21,030 | ||||
Product sales | 99 | 17 | ||||||
Milestones and license fees | 19 | 7 | ||||||
Total revenues | 24,601 | 21,054 | ||||||
Costs and expenses: | ||||||||
Cost of goods sold | -- | 6 | ||||||
Cost of license fees | 2 | -- | ||||||
Research and development | 20,227 | 19,365 | ||||||
General and administrative | 6,413 | 5,410 | ||||||
Total operating expenses | 26,642 | 24,781 | ||||||
Operating loss | (2,041 | ) | (3,727 | ) | ||||
Other (expense) income: | ||||||||
Interest income, net | 70 | 93 | ||||||
Interest expense | (10,589 | ) | (10,741 | ) | ||||
Other gain (loss) | 211 | (234 | ) | |||||
Total other expense, net | (10,308 | ) | (10,882 | ) | ||||
Loss before income tax expense | (12,349 | ) | (14,609 | ) | ||||
Income tax expense | -- | 1,082 | ||||||
Net loss | ($12,349 | ) | ($15,691 | ) | ||||
Net loss per common and potential common share: |
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Basic | ($0.14 | ) | ($0.26 | ) | ||||
Diluted | ($0.14 | ) | ($0.26 | ) | ||||
Weighted average common and potential common share: | ||||||||
Basic | 86,749 | 60,400 | ||||||
Diluted | 86,749 | 60,400 |
NPS PHARMACEUTICALS, INC. AND SUBSIDIARIES | |||||||||
Condensed Consolidated Balance Sheets | |||||||||
(In thousands) | |||||||||
(Unaudited) | |||||||||
September 30, | December 31, | ||||||||
2011 | 2010 | ||||||||
Assets: | |||||||||
Cash, cash equivalents and marketable investment securities | $ | 189,599 | $ | 133,771 | |||||
Current restricted cash and cash equivalents | -- | 50,784 | |||||||
Account receivable | 26,684 | 26,721 | |||||||
Other current assets | 7,838 | 4,619 | |||||||
Equipment, net | 3,044 | 1,142 | |||||||
Goodwill | 9,429 | 9,429 | |||||||
Debt issuance costs, net | 625 | 2,143 | |||||||
Other long-term assets | 224 | 296 | |||||||
Total assets | $ | 237,443 | $ | 228,905 | |||||
Liabilities and Stockholders’ Deficit: | |||||||||
Current liabilities | $ | 40,616 | $ | 82,145 | |||||
Convertible notes | 16,545 | 50,000 | |||||||
Non-recourse debt, less current portion* | 211,525 | 244,256 | |||||||
Other long-term liabilities | 7,316 | 7,779 | |||||||
Total liabilities | 276,002 | 384,180 | |||||||
Common stock and additional paid-in capital | 943,291 | 798,907 | |||||||
Accumulated other comprehensive income | (36 | ) | 1 | ||||||
Accumulated deficit | (981,814 | ) | (954,183 | ) | |||||
Total stockholders' deficit | (38,559 | ) | (155,275 | ) | |||||
Total liabilities and stockholders' deficit | $ | 237,443 | $ | 228,905 | |||||
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* Non-recourse debt secured by Sensipar®/Mimpara®, Preotact® and REGPARA® royalty revenue
CONTACT:
NPS Pharmaceuticals, Inc.
Susan M. Mesco, 908-450-5516
smesco@npsp.com