It wasn't quite two years ago NPS Pharmaceuticals Inc. wasstruggling to complete its initial public offering, which ended up withtwo million shares sold at $5.50 apiece.

On Friday the Salt Lake City company completed a follow-onoffering that brought in $45 million, 76 percent more in grossproceeds than NPS was seeking when it registered in March to selltwo million shares and its stock was trading at $12.75. The offering,increased to three million shares, was priced at $15.

The offering continued what's been a very nice run of news for NPS,which is trying to develop small molecules that target cell surfacereceptors and ion channels for hyperparathyroidism, osteoporosis andcentral nervous system disorders.

The company ended 1995 with $8.3 million in cash and equivalents.Since then it has received $17.5 million from collaborator AmgenInc. in license fees and equity investments and $3 million fromSmithKline Beecham for a milestone payment, in addition the to the$42 million it netted from the public offering.

"We went public in the spring of 1994 when the biotech market wasgoing downhill rapidly," said Bob Merrell, vice president, finance,and chief financial officer for NPS. "The commercial opportunity hasbeen validated in the minds of investors because of the Amgen andKirin license agreements. The technology is the same," he said, butinterest from large partners and success from early trials led toinvestors taking notice.

Merrell said the interest shown during the road show made it clearthere was strong demand for the stock, and NPS thought it anappropriate opportunity to take advantage. He said new investorsshould improve the trading characteristics of the stock(NASDAQ:NPSP), which closed Friday up 25 cents at $16.25.

NPS' lead product candidate is Norcalcin, which targets the calciumreceptor on the parathyroid gland. It is partnered with Kirin BreweryCo. Ltd., of Tokyo, for much of Asia and with Amgen everywhereelse. Two Phase I and two Phase I/II studies are completed, andshowed a dose-dependent decrease in the levels of parathyroidhormone in the blood. Higher doses also produced reduction incalcium levels.

Amgen, of Thousand Oaks, Calif., assumed developmentresponsibility for Norcalcin with the signing of a definitive agreementin the first quarter. An Amgen spokesman said company officials areanalyzing data from the trials and haven't determined a developmentstrategy going forward.

With SmithKline Beecham, of London, NPS is collaborating in thearea of osteoporosis. NPS received a $3 million milestone payment inJanuary. That preclinical program also includes a focus on theparathyroid calcium receptor, the stimulation of which could help inbone formation. Targeting C-cell and osteoclast calcium receptorscould help in suppressing bone resorption.

Since partners are fully funding the Norcalcin and osteoporosisprogram _ and NPS could get another $40 million in developmentalmilestones from Kirin and Amgen _ the company is well positionedto focus on other programs.

"The proceeds," Merrell said, "will be used to build the pipeline."NPS 1506 appears to be the next compound taken forward. Thatcompound antagonizes the NMDA receptor at a unique point, hesaid, and potentially could offer neuroprotective qualities. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.