NPS gets good news but Gattex overhang remains

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After the pain induced last week by a safety scare for its lead pipeline product comes some welcome relief today for NPS Pharmaceuticals in positive pivotal trial data for Natpara (NPSP558), a potential breakthrough for the treatment of hypoparathyroidism (Gattex cancer cases a concern but not the end of the road, November 1, 2011).

Shares in the orphan drug specialist gained 9% to $6.11 in early trade today, a nice boost but still well down on the $7.76 price prior to the Gattex bombshell. NPS plans to file Natpara with the FDA next year and launch in 2013, by which time Gattex could also be on the market, and analysts have pencilled in sales reaching $100m by 2016. Introducing a high priced, daily injectable drug as an alternative to cheap oral supplements of calcium and vitamin D could present as much of a challenge to NPS as gaining regulatory clearance – the impressive clinical data for Natpara is therefore a good start.

Unmet need

Natpara is a bioengineered replica of human parathyroid hormone (rhPTH 1-84) designed to treat hypoparathyroidism, a rare endocrine disorder caused by insufficient levels of parathyroid hormone, the main regulator of calcium and phosphorus in the body.

There is no FDA-approved replacement therapy for hypoparathyroidism, estimated to affect 50,000-100,000 patients in the US; muscular and neurological symptoms, as well as bone impairments, are managed with often large doses of oral calcium and vitamin D.

Results from the 134-patient Replace trial showed that 53% of Natpara-treated patients achieved the primary endpoint – defined as a 50% or greater reduction after 24 weeks in oral calcium supplementation and active vitamin D therapy, while maintaining normal levels of serum calcium concentration – versus 2% on placebo.

Additionally, 43% of patients treated with Natpara achieved independence from active vitamin D therapy and a calcium supplementation dose of 500mg/day or less, compared to just 5% with placebo. Safety results were limited, but encouragingly the drop out rate with the drug was just 7% compared to 16% on placebo.

Prove it

Given that Natpara could become the first FDA-approved therapy for such a niche disorder as hypoparathyroidism, NPS will have an educational and promotional challenge ahead – as such a large part of its investor conference call today was devoted to detailing the dynamics of the disorder and therefore Natpara’s clinical and commercial potential.

A concentrated endocrinologist prescriber base, a highly motivated patient population and strong advocacy groups, concerned by the high treatment and daily monitoring burden and potentially harmful affects of calcium and vitamin D supplements, were highlighted the company. NPS is confident the drug will be covered by Medicare and Medicaid, and although Natpara will be a once-daily subcutaneous injection, it will be delivered by a pen type injector, a relatively easy and painless procedure.

With the outlook for Gattex very much in the balance, NPS really needs Natpara to pull through (Event - NPS hoping for second boost, October 7, 2011). And once on the market the company will need to make the most of it given the lack of patent protection which means just seven years of orphan drug exclusivity will protect the product in the US.

Further upside could therefore come from ongoing talks with European partner Nycomed, now Takeda, who licensed the product to treat osteoporosis in 2004. With milestones and royalties receivable, a decision by Takeda to seek European approval in hypoparathyroidism would be another nice boost, but until the Gattex issue is resolved NPS will not emerge from the woods.

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