NPS Pharmaceuticals, Inc.’s (NPSP) shares were up 3.3% after the company announced that the Japanese Ministry of Health, Labor and Welfare (MHLW) has granted orphan drug designation to teduglutide (U.S. trade name – Gattex; EU trade name – Revestive) for the treatment of short bowel syndrome (SBS).
We note that the designation is granted by Japan’s MHLW to candidates being developed to treat diseases with a high medical need and affecting less than 50,000 patients in the country. This designation makes NPS Pharma eligible for certain incentives for the development of teduglutide including subsidies and tax credits, priority consultation and review for marketing authorization and an extended reexamination period of up to 10 years.
Additionally, owing to strong medical need for SBS treatments in Japan the MHLW's expert committee on Unapproved New Drugs and New Indications with High Medical Needs requested NPS Pharma to develop teduglutide for the treatment of adults suffering from SBS earlier this year.
We note that the committee on Unapproved New Drugs and New Indications with High Medical Needs was established to enhance the development of drugs and indications approved in the U.S. and EU, but not yet approved in Japan.
Currently, NPS Pharma is preparing to commence a small study in Japanese patients with SBS before the end of 2014.
Gattex is NPS Pharma’s sole marketed product. The company generated sales of $67.9 million from Gattex and Revestive in the first nine months of 2014 compared to $16.5 million in the first nine months of 2013. NPS Pharma launched Revestive in Germany in September this year. The company is preparing to roll out the drug in other EU countries in late 2014 and early 2015.
Meanwhile, NPS Pharma has a key regulatory event coming up in January when the FDA will decide on the approval status of Natpara. Chances of approval look high given the positive recommendation gained from the FDA’s advisory panel. We expect investor focus to remain on its regulatory status.
NPS Pharma currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Lannett Company, Inc. (LCI), Sucampo Pharmaceuticals, Inc. (SCMP) and Valeant Pharmaceuticals International, Inc. (VRX). All three carry a Zacks Rank #1 (Strong Buy).
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