Press Release
NPS Pharmaceuticals Provides Corporate Update, Reports Third Quarter 2002 Operating Results
SALT LAKE CITY, Oct 21, 2002 /PRNewswire-FirstCall via COMTEX/ -- NPS Pharmaceuticals, Inc. (Nasdaq: NPSP) provided an update today of recent corporate activities and reported its operating results for the third quarter ended September 30, 2002.
MANUFACTURING CAPABILITIES EXPANDED
NPS announced that it has executed a binding Letter of Intent (LOI) with Boehringer Ingelheim Austria GmbH, located in Vienna, Austria (BIA) for the manufacture of commercial quantities of bulk drug supplies of PREOS(TM), the company's proprietary drug candidate for the treatment of osteoporosis. BIA is an affiliate of Boehringer Ingelheim International, GmbH. Technology transfer activities are already in progress. A definitive Commercial Manufacturing Agreement has been negotiated and the company expects timely execution.
(Photo: http://www.newscom.com/cgi-bin/prnh/20000218/NPSLOGO )
In other news related to the manufacture of its proprietary molecules, NPS announced on Thursday, October 17, 2002 that Stephen R. Parrish has been appointed Vice President, Manufacturing. Mr. Parrish brings over 20 years of experience in managing the manufacture of small molecules and protein drugs. Previously he worked as a consultant to NPS for several months before accepting this position.
ADDITIONAL ALX-0600 CLINICAL RESULTS REPORTED
NPS also reported today top-line data from the last two patient cohorts in its pilot Phase II study of ALX-0600, the company's proprietary drug for treating gastrointestinal disorders. Data from the first three patient cohorts were presented at the Digestive Disease Week meeting earlier this year. In those patients, all of whom had short bowel syndrome and no functioning colon, daily subcutaneous injections of ALX-0600 for 21 days produced improved intestinal absorption as measured by nutrient uptake, growth of cells lining the intestine, and increased body weight. The fourth patient cohort comprised participants from the first three groups who underwent a drug washout period, and were then re-challenged with ALX-0600. These patients responded positively to the new administration of drug, and, importantly, did not develop antibodies to ALX-0600. The fifth and final patient group in the study comprised people with some functioning colon capable of providing minimal quantities of native glucagon-like peptide 2, the naturally occurring hormone that ALX-0600 is intended to replace or supplement. These patients also responded positively to the drug with indications of improved nutrient and energy absorption. No serious, drug-related, adverse events were observed in any of the patients in the study. Detailed data from these patient groups are being prepared for presentation in a peer-reviewed scientific publication.
THIRD QUARTER OPERATING RESULTS
NPS also announced today its operating results for the third quarter ended September 30, 2002. The company incurred a net loss for the quarter of $18.3 million, or $0.60 per share, compared to a net loss in the third quarter of 2001 of $14.1 million, or $0.47 per share. For the nine-month period, the net loss was $61.4 million, or $2.02 per share, compared to $36.4 million, or $1.22 per share for the nine months ended September 30, 2001.
Revenues for the third quarter of 2002 were $140,000, compared to revenues of $395,000 for the same period last year. Revenues for the nine months ended September 30, 2002 were $2.0 million, compared to $1.4 million in the same period of 2001. The increase in revenues for the nine months ended September 30, 2002 compared to the same period in the prior year was mainly due to amounts earned under the research funding agreement with the Government of Canada pursuant to the Technology Partnership Canada program. As a result of ongoing negotiations with the Government of Canada to amend certain provisions of the research funding agreement and beginning with the third quarter of 2002, NPS did not and will not recognize revenue under the terms of this agreement until discussions with the Government of Canada are finalized.
Research and development expenses were $16.9 million for the third quarter of 2002 compared to $14.0 million for the third quarter of 2001. For the nine-month period, research and development expenses were $58.2 million compared to $38.2 million for the same period in 2001. Research and development expenses increased over the prior year amounts primarily due to the costs of conducting clinical trials for PREOS, including the costs of the on-going pivotal Phase III trial; increased activities in the development of ALX-0600; and costs related to the manufacture of clinical supplies of PREOS and ALX-0600.
General and administrative expenses were $3.2 million for the quarter ended September 30, 2002 compared to $2.5 million in the same quarter in 2001. For the nine-month period, general and administrative expenses were $10.4 million compared to $9.0 million for the same period in 2001. The increase in general and administrative expenses over the prior year is due to market development activities associated with PREOS and marketing personnel.
Amortization of intangibles decreased from $856,000 to $334,000 for the third quarter of 2002 as compared to the same period in the prior year and from $2.6 million to $1.0 million for the nine months ended September 30, 2002 as compared to the same period in the prior year. The decreases are the result of the company adopting the provisions of Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, on January 1, 2002. SFAS No. 142 eliminated the amortization of goodwill. During the three and nine months ended September 30, 2001, the company recorded amortization expense of $520,000 and $1.6 million, respectively, or $.02 and $.05, respectively, per basic and diluted share, that would not have been recorded under SFAS No. 142.
Other income, net, decreased from $2.9 million to $2.0 million for the three months ended September 30, 2002 as compared with the same period in the prior year, and from $12.1 million to $6.1 million for the nine months ended September 30, 2002 as compared with the same period in the prior year. The decreases in 2002 are primarily the result of decreased interest income resulting from lower interest rates and decreased cash, cash equivalents and marketable investment security balances during 2002 as compared with the same periods in the prior year. These balances decreased as cash, cash equivalents and marketable investment securities were used to fund current operations. Additionally, during the nine months ended September 30, 2001, the company recognized income of $1.3 million from an equity method investment. A similar income amount was not recorded during the nine months ended September 30, 2002.
NPS PHARMACEUTICALS, INC. AND SUBSIDIARIES
(a Development Stage Enterprise)
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
October 22,
1986
(inception)
Three Months Ended Nine Months Ended through
September 30, September 30, September 30,
2002 2001 2002 2001 2002
Revenues from
research and
license
agreements $140 $395 $2,021 $1,377 $75,540
Operating expenses:
Research and
development 16,874 14,041 58,217 38,238 237,763
General and
administrative 3,206 2,512 10,365 8,988 69,516
Amortization of
intangibles 334 856 991 2,580 7,963
In-process
research and
development
acquired -- -- -- -- 17,760
Total
operating
expenses 20,414 17,409 69,573 49,806 333,002
Operating
loss (20,274) (17,014) (67,552) (48,429) (257,462)
Other income,
net 1,990 2,889 6,129 12,069 36,854
Loss before
taxes (18,284) (14,125) (61,423) (36,360) (220,608)
Income tax
expense -- -- 10 -- 1,328
Loss before
cumulative
effect of
Accounting
change (18,284) (14,125) (61,433) (36,360) (221,936)
Cumulative effect
of accounting
change -- -- -- -- (500)
Net loss $(18,284) $(14,125) $(61,433) $(36,360) $(222,436)
Basic and
diluted net
loss per
common and
common-
equivalent
share $(0.60) $(0.47) $(2.02) $(1.22)
Weighted average
common and
Common-
equivalent
shares
Outstanding
- basic and
diluted 30,435 29,993 30,338 29,859
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, December 31,
2002 2001
Cash, cash equivalents and
marketable investment securities $157,601 $207,518
Other current assets 3,986 11,837
Plant and equipment, net of
accumulated depreciation and
amortization 4,322 4,868
Other assets, net of accumulated
amortization 9,852 10,753
Total assets $175,761 $234,976
Current liabilities $11,160 $13,041
Paid-in capital and common stock 385,722 382,711
Deferred compensation (5) (34)
Accumulated other comprehensive
income (loss):
Net unrealized gain on marketable
Investment securities 2,770 2,030
Foreign currency translation (1,450) (1,769)
Deficit accumulated during
development stage (222,436) (161,003)
Net stockholders' equity 164,601 221,935
Total liabilities and
stockholders' equity $175,761 $234,976
CONFERENCE CALL INFORMATION
A conference call will be held today at 9:00 a.m. EDT. To participate in the call, dial 1-800-374-0232 and use confirmation code 5823606. In addition, live audio of the conference call will be simultaneously broadcast over the internet and may be accessed under the Investor Relations page, Calendar of Events section of the company's website ( www.npsp.com ). Please click on the webcast link and follow the prompts for registration and access.
If you are unable to participate in the live call, a replay will be available at 1-800-642-1687 (with confirmation code 5823606) until midnight, MDT, November 4, 2002. International callers may dial 706-645-9291 using the same confirmation code. The webcast portion of the call will also be available on the NPS website for the same period of time.
NPS discovers, develops and intends to commercialize 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. The two most advanced product candidates are AMG 073 for the treatment of hyperparathyroidism, which has been licensed to Amgen and is in Phase III clinical trials, and PREOS, the company's proprietary protein for the treatment of osteoporosis, which is in a Phase III trial. Additional information is available on the company's website, http://www.npsp.com .
NOTE: Statements made in this press release, which are not historical in nature, constitute forward-looking statements within the meaning of the federal securities laws. These statements include those concerning our expectations, beliefs and/or intentions regarding the following: the discovery, development and commercialization of small molecule drugs and recombinant proteins, specifically, our product candidates, AMG 073, PREOS, and ALX-0600; our agreement with Technology Partnerships Canada; and, manufacturing capabilities and finalizing a definitive arrangement with Boehringer Ingelheim. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially. Such risks and uncertainties include, but are not limited to, risks inherent in our research and development activities, including the successful continuation of our strategic collaborations, the successful completion of our and our collaborators' clinical trials and commercialization of products, obtaining regulatory approvals, manufacturing uncertainties and dependence on third parties, our ability to renegotiate agreeable terms with Government of Canada, and such other risks described in other documents that we file from time to time with the Securities and Exchange Commission. All information in this press release is as of October 21, 2002, and we undertake no duty to update this information.
SOURCE NPS Pharmaceuticals, Inc.
CONTACT: David L. Clark, Vice President, Operations, NPS Pharmaceuticals, Inc., +1-801-583-4939
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