NPS Pharma’s Not-So-Excellent Wall Street Adventure
On Monday morning, the phones were ringing off the hook at NPS Pharmaceuticals’ (NASDAQ: NPSP) Bedminster, N.J. headquarters, but no one could hear them. The freak autumn snowstorm over the weekend knocked out the company’s phone lines. And CEO Francois Nader and other top executives had lost power at their nearby homes, so they couldn’t charge their cell phones. The timing of this mini natural disaster couldn’t have been worse: At 9 a.m. Monday, the company released results from a pivotal trial of its lead drug to treat a rare intestinal disorder—data that revealed that three patients in the trial developed cancer, and two of them died.
The stock market opened and NPS’ stock took a harrowing free fall, plummeting 33 percent to $5.17 a share. That fact that this was all happening on Halloween only added to the spookiness of the situation. That afternoon, Nader and Bo Joelsson, who is leading the development of the drug for NPS, spent about an hour on a conference call trying to soothe the frayed nerves of Wall Street analysts. “It was a perfect storm,” Nader told them—a phrase he repeated in a phone interview the next day with Xconomy.
This morning, NPS will be releasing its third-quarter financial report and holding another conference call with analysts, during which Nader expects to field some additional questions about the cancer cases in the trial. “We’re working internally to determine whether there’s more we can say to dispel any misunderstanding,” Nader (who recently joined our ranks of Xconomists) said on Tuesday.
NPS is developing the drug, called teduglutide (Gattex), to treat short bowel syndrome, a disease that affects about 15,000 patients in the U.S. The three patients who developed cancer—two had lung cancer and one a gastrointestinal tumor—were participating in the trial at sites in Poland. Both lung cancer patients had been long-time smokers.
Unbeknownst initially to NPS, the clinic where the two lung cancer patients were treated had a staggeringly bad track record: a rate of lung cancer among short-bowel-syndrome patients that’s 66 times higher than that which occurs in the general population. Nader suspects … Next Page »