West Coast Editor

Less than two months after getting an approvable letter wanting more information about Preos, its parathyroid hormone to reduce fracture risk, NPS Pharmaceuticals Inc. took another stock hit on word that the agency proposed another clinical trial.

The company's shares (NASDAQ:NPSP) closed Wednesday at $4.99, down $3.22, or 39.2 percent. NPS lost more than 37 percent on the day the approvable letter was made public, ending at $8.77. (See BioWorld Today, March 13, 2006.)

News of the FDA's opinion regarding Preos comes on the heels of the drug's approval under the brand name Preotact late last month by the European Commission, and Salt Lake City-based NPS' partner, Nycomed Group, of Roskilde, Denmark, plans a launch early in the second half of this year.

Meanwhile, a few details of what might be done to satisfy the FDA emerged when Tony Coles, president and chief operating officer, described in a conference call after the market closed Tuesday, what he called "the first in a series of exchanges with the agency," as possible solutions are examined.

In the approvable letter, the agency referred to pivotal data that showed significant fracture reductions in postmenopausal women with osteoporosis, but also showed a higher incidence of hypercalcemia in patients receiving Preos compared to placebo.

"During [Monday's] meeting, the FDA proposed that we generate additional clinical safety data in the form of a new clinical trial, in order to adequately address the hypercalcemia issue raised in the March letter," Coles said, and NPS officials offered a counter-proposal that would use existing data to "demonstrate improvements" in the overall benefit-risk profile.

Although the FDA has not yet required a new trial, the mere suggestion apparently is what caused Wednesday's stock tumble.

While company leaders are "carefully evaluating our options," they could be in a position to file an amendment to the new drug application by the end of this year or early next that would include a reanalysis of existing data, along with a safety overview to include more bone biopsy data and specific answers to FDA's questions regarding the reliability and use of Preos' subcutaneous injection device, he said.

Noting there are "many issues to consider," Coles asked investors to allow time for NPS to sort through them.

Preos is expected to compete with Indianapolis-based Eli Lilly and Co.'s galloping Forteo (teriparatide), which posted U.S. sales of $87.2 million in the first quarter of 2006, an increase of 106 percent over the previous year's first quarter.

In February, NPS said results from the Phase IIa proof-of-concept study with another pipeline compound, teduglutide, in patients with moderate to severe Crohn's disease showed a positive and consistent trend toward efficacy, and a dose response favoring the highest dose group. The drug also was well tolerated with no serious adverse events reported related to the drug. Teduglutide is an analogue of glucagon-like peptide 2, a hormone that regulates the growth, proliferation and maintenance of cells lining the gastrointestinal tract.

In its earnings report, NPS posted a net loss of $38.3 million, or 83 cents per share, compared to a net loss in the first quarter of 2005 of $45 million, or $1.16 per share. The company had about $215.5 million in cash, cash equivalents and marketable investment securities.