NPS Announces Aggressive Plan to Restructure Operations and Cut Costs

14-Jun-2006

NPS Pharmaceuticals, Inc.CEO N. Anthony Coles, M.D., announced a new initiative to maximize shareholder value by significantly reducing cash burn, reprioritizing the company's development portfolio, and leveraging its proprietary R&D assets. To support this initiative, the company is taking the following immediate actions. NPS is reducing staff at each of its facilities and discontinuing all activities related to the commercialization of PREOS(R) in the United States. Specifically, NPS is reducing staff by 53 percent; closing a technical operations facility in Mississauga, Ontario, Canada; eliminating commercial sales and related field operations; terminating the company's agreement with Allergan to promote Restasis(R) Ophthalmic Emulsion to rheumatologists; and subleasing 50 percent of its Salt Lake City facility. The net effect of these changes reduces the total number of employees to 230. Additionally, the board of directors has reduced director compensation in accordance with these cost cutting measures. As a result of this restructuring, cash burn for 2006 will decrease to approximately $135 million to $145 million. The company expects to end 2006 with two years of cash, with an approximate year-end cash and cash equivalents balance between $114 million and $124 million.

NPS will focus its clinical development activities on teduglutide, its proprietary potential first-in-class drug candidate for gastrointestinal disorders, and will work to accelerate the drug's development for Crohn's disease and other indications. Patient enrollment for the Short Bowel Syndrome (SBS) trial continues and aggressive efforts will be made to file a new drug application for this indication by 2008.

Because of the delay in FDA approval of PREOS and the uncertainty regarding the time and expense needed to obtain U.S. approval, NPS is revising its U.S. strategy for PREOS. The company is discontinuing all current commercialization activities for the U.S. launch of PREOS, while evaluating the most appropriate regulatory, development and investment options for bringing PREOS to the market. The company has previously disclosed that the two options it is assessing are the filing of an amendment with data from existing and ongoing studies and the initiation of a new clinical trial to collect additional data to demonstrate the benefit/risk ratio of PREOS.

The NPS discovery team is currently working on a series of antiepileptic compounds from which it expects to select a lead candidate for preclinical development by the end of the year. Discovery scientists are also working on earlier-stage proprietary programs in obesity and schizophrenia.

https://www.bionity.com/en/news/55488/nps-announces-aggressive-plan-to-restructure-operations-and-cut-costs.html