Orphan Drug Status to NPSP's Natpara - Analyst Blog

NPS Pharmaceuticals, Inc. NPSP announced that its pipeline candidate Natpara (rhPTH [1-84]) has been granted orphan drug status in the EU. Conatus is developing Natpara for the treatment of hypoparathyroidism. The production of parathyroid hormone is not sufficient in patients affected by this disorder. The hormone is a prime regulator of mineral homeostasis in the human body.

The designation is granted by the European Commission to candidates being developed to treat rare (affecting a maximum of five in 10,000 people in the EU) life-threatening or chronically debilitating diseases. The positive news from the EU affected the company's shares positively.

Natpara also enjoys similar status in the U.S. The U.S. Food and Drug Administration granted orphan status to the candidate in 2007. By virtue of this status, NPS Pharma is eligible for some benefits in developing the candidate.

We note that NPS Pharma submitted a Biologic License Application to the FDA in Oct 2013 for treating hypoparathyroidism. European approval for Natpara in the same indication is expected to be sought during the course of 2014. Management at NPS Pharma is highly bullish on the prospects of the candidate.

Another interesting candidate in NPS Pharma's pipeline is NPSP795 (autosomal dominant hypocalcemia). NPS Pharma intends to throw more light on the development of the candidate during the course of the year.  Successful development and subsequent commercialization of the pipeline would reduce the company's dependence on its sole marketed product Gattex (teduglutide). We expect investor focus to remain on the company's pipeline going forward.

We note that Gattex is available in the U.S. (since Feb 2013) for treating adults with short bowel syndrome SBS, dependent on parenteral support. The drug was cleared in the EU in 2012 (European trade name: Revestive). SBS patients should be stable following a period of intestinal adaptation post operation.  NPS Pharma expects to launch the drug in the EU in the first half of 2014.

NPS Pharma carries a Zacks Rank #3 (Hold). Better ranked stocks include Jazz Pharmaceuticals JAZZ, Forest Laboratories Inc. FRX and WuXiPharmaTech (Cayman) Inc.  WX. All 3 stocks carry a Zacks Rank #1 (Strong Buy).