NPS Pharmaceuticals Skyrockets Despite Quarterly Earnings Shortfall

Jacob Harper |

Small cap biopharmaceutical company NPS Pharmaceuticals, Inc. (NPSP) released quarterly earnings on Aug. 8, and the company posted larger net loss expectations than expected. But the company both beat revenue projections and provided promising information concerning future sales of their flagship products, and the market responded enthusiastically.

In their earnings report, the company reported better-than-expected sales of their newest US-approved drug, Gattex. Known as Revestive in the European market, it helps patients with Short Bowel Syndrome (SBS) who have to rely on feeding tubes to better absorb nutrients. The drug was approved by the FDA in December 2012.

The company reported $4.8 million in sales of Gattex in Q2, which exceeded their own expectations, and expect the drug to increase in sales as the drug continues to be prescribed to more patients with SBS. They expect global sales  in 2013 of Gattex and Revestive of between $25 and $30 million.

NPS Pharmaceuticals was also buoyed by their royalty portfolio. In the earnings call with investors, Chief Financial Officer Luke Beshar singled out their ownership of the drug Sensipar, which the company licenses to rapidly growing biotech company Amgen, Inc. (AMGN) . Beshar said royalties of that drug increased by 23 percent, bringing in $29 million for NPS for the the quarter.

Between Sensipar’s growing revenues and the launch of Gattex, the company is confident in their prospects going forward. They reported $181 million in cash on hand and increasing prescriptions of both Sensipar and Gattex. Thought the company has been losing money eight of the last nine quarters, analysts expect NPS Pharmaceuticals to begin posting a consistent profit beginning in Q1 2014.

For their second quarter 2013 earnings report, NPS Pharmaceuticalsreported a net loss of $12 million, or $0.13 per share, versus the net profit of $11.2 million, or $0.08 per share, from the same period a year ago. Revenue for the quarter was $36.51 million, as compared to $28.5 million from the previous year. Analysts were expecting a loss of $0.07 per share on revenues of $31.62 million.

NPS Pharmaceuticals is up a whopping 25.08 percent to hit $22.64 a share amid heavy volume. They’re up 97.81 percent on the year.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AMGN Amgen Inc. 140.59 -0.60 -0.42 4,387,570
FNDGF Fine Digital Inc n/a n/a n/a 0

Comments

Emerging Growth

Veritas Pharma Inc.

Veritas Pharma Inc, formerly Seashore Organic Medicine Inc is an emerging producer and distributor of medical marijuana.

Private Markets

Uber

Uber connects riders with safe, reliable, convenient transportation providers at a variety of price-points in cities around the world. Uber makes money from charging their drivers 20% of the fare…

Wealthfront

Wealthfront is an automated investment service that serves as an alternative to traditional financial advisory services. The company manages a diversified, continually rebalanced portfolio of index funds on their clients’…