NPSP Begins Run-Up into FDA Advisory Panel, Approval

After a Buy rating from yesterday and a presentation Wednesday morning at the UBS Global Life Sciences conference, NPS Pharmaceuticals (NASDAQ:NPSP) gapped up 4% at the open and is trading up even higher, around $8.75. The news comes after another upgrade from ThinkEquity on Monday, which raised NPSP’s target price from $10 to $12 based on upcoming catalysts. Most notable, the FDA will review the company’s pending NDA for Gattex at an advisory committee meeting on October 16th, followed by the drug’s PDUFA date on December 30.


Gattex, which is a peptide-based treatment for Short Bowel Syndrome (SBS), has orphan drug status from both the FDA and the European Medicines Agency, and was approved for marketing in the E.U. earlier this month. NPS has a strong cash position and should not need additional capital prior to the advisory panel or approval decision, creating a value-driving series of catalysts for NPS investors. In fact, the company expects to to launch the product with on-hand cash and equivalents, so chance of downside from financing activity is minimal in the next year. Analysts are guiding for FDA approval of Gattex based on previous trials and the need for an SBS drug, which will be preceded by a vote from the Gastrointestinal Drugs Advisory Committee meeting in October. A run-up into both dates should be expected, although sentiment will need to be assessed after the advisory meeting to weigh the chances of an approval. A long-term investment will require further examination post-approval based on the market for Gattex, as well as a look at the product’s launch and performance in Europe. Gattex, branded Revestive in the E.U., is out-licensed to Takeda for European marketing.