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NPS Pharmaceuticals, Inc. Message Board

  • gladiator38139 gladiator38139 Feb 14, 2013 4:47 PM Flag

    What will happen after earnings...Still worth it?

    NPSP may have Gattex and Natpara on the way, but does that really give them to rally now? Even if the earnings will look good down the road, Gattex will not help until Q3. People must have been waiting to sell until after earnings, but when the dates got screwed up, people got impatient and pulled the trigger too early? This is my thesis? Any others?

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    • OK, this is what I dug from the previous post by showman01. His valuation is a bit optimistic for me but hey, we can all dream, right?

      "1. A strong revenue stream associated with licensed product Amgen markets called Sensipar. The get about 100m/year royalty revenue of which part is applied towards a non-recourse note they have with Amgen. The NPV of Sensipar looking at cash flows through 2018 when patent protection lapses is 400-500m+. This is as close to a sure thing as you can have as it has a strong track record of sales growth quarter over quarter.

      2. GATTEX - this is a new, first in class drug that treats short bowel syndrome. It is why I started buying the company several years ago when I heard a research call reporting phase two trials and the lead researcher choked up as she noted that one patient had been weened entirely of pe feeding (eating via a feeding tube). It is an orphan drug meaning a small patient population but it is the ONLY treatment that changes outcomes for patients and the company and analysis value it at 250-500m a year at peak sales with extended patent protection due to it's orphan drug status. If you assumed an extreme low end value the NPV over ten+ years is 2-2.5 billion. This week GATTAX received a unanimous vote by the FDA board that reviewed the drug and was recommended for approval by the FDA staff reviewing. Likelihood of formal approval in next few weeks is 90%+. It is already approved for sale in Europe.

      3. NATPARA - NPS next late stage drug candidate is again an orphan drug candidate with great third phase drug trial results that is likely to be filed with the FDA for approval in Q2-3 of 2013. It is used in the treatment of Hypoparathyroidism. Several analysts rate probability of approval also extremely high due to it's efficacy and apparent lack of notable side effects in all trials. Valuation models I have seen forecast peak sales between 250m - 500m+ again for an extended period due to their orphan drug status. NPV 2-2.5billion +.

      4. The balance sheet has very little recourse debt and 110m in cash. They should have a big milestone payment for GATTEX coming soon. Management is very honest, forthcoming and conservative.

      I think the NPV with approval of all drugs is between 4 - 6 billion dollars. With 85m shares out that would be $45/ share plus in the next two years.

      This Fall the biotech sector has had a nice few months generally up. This year NPSP is up over 40% but has great price variation. I cannot explain why but part is that 91% is institutionally held so float is small and shorts can really move the stock but I think it is also because it is speculative for many and so they trade in and out a lot.

      We hit a high a few weeks at $11 after Cramer said Buy (around $7.5 at the time) and volume hit 4-5m when the average is under 1m. Then GATTAX got unanimous FDA panel support which is great news but Cramer said sell and gigantic volume and shorts piled in pushing is down to $9.25 or so.

      I expect $12.5+ as soon as formal FDA approval happens in next 30-60 days and believe we will not see it under $8 again absent some freak FDA disapproval or other delay.

      You can look at the Yahoo board and see several analysts have Buy or Strong Buy ratings and $12.50 - $15 targets in the next 12 months. No analysts I follow have longer term valuation models.

      I hope this is helpful and we see more long investors come on board. "

      Sentiment: Strong Buy

    • Just take a mid term view and you will seemthe valuations are compellingnwell above $12 a share. This is what happens when a stock with a relatively small non-institutional float is being actively shorted. It can, and should, go,the othee direction and soon!

      Sentiment: Strong Buy

    • Who the heck knows? It's everybody's guess at this point. It's either the ones who got in way earlier are getting out now or they are simply shaking the tree before the big run up.

45.970.00(0.00%)Feb 20 3:59 PMEST