NPS Pharmaceuticals Inc., which went public in May 1994 with drugdiscovery technology aimed at hyperparathyroidism andosteoporosis, is returning to the equity markets with a follow-onoffering of 2 million shares to raise at least $24 million.

The Salt Lake City company ended 1995 with $8.3 million in cashand a net loss of $3.1 million. Based on the $13 closing price ofNPS' shares (NASDAQ:NPSP) Thursday, the stock offering wouldraise $26 million. NPS ended the day up 25 cents.

In registering for the public offering of 2 million shares, NPSestimated a per-share price of at least $12.25 for gross proceeds of$24.5 million. Following the sale, NPS will have about 10.2 millionshares outstanding.

Underwriters are Vector Securities International Inc., of Deerfield,Ill., and UBS Securities LLC and Salomon Brothers Inc., both ofNew York. They have options to purchase an additional 300,000shares to cover overallotments.

The company's technology is based on developing small moleculecompounds that regulate cell surface receptors and ion channels. Themost advanced drug candidate is Norcalcin, which targets the calciumreceptor on the parathyroid gland.

The drug is designed to treat hyperparathyroidism, an age-relateddisorder, by reducing secretion of parathyroid hormones. Excessivesecretion of the hormones elevate calcium levels in the blood, leadingto kidney damage, bone loss and cognitive impairment.

NPS this week signed a definitive agreement with Amgen Inc., ofThousand Oaks, Calif., for development of Norcalcin. The proposedcollaboration was reported in December 1995. (See BioWorldToday, Dec. 29, 1995, p. 1.)

In completing the deal, NPS received an initial license fee of $10million from Amgen plus an equity investment of $7.5 million for thesale of 1 million shares. The $7.50 per-share price of the stock wasset during negotiation of the alliance in November 1995. Based onthe trading price Thursday, those shares were worth $13 million toAmgen.

NPS could receive another $26 million in milestone payments fromAmgen, which purchased worldwide rights to Norcalcin outside Asia.

NPS has an agreement worth up to $25 million with Kirin BreweryCo. Ltd., of Tokyo, for rights to Norcalcin in Japan, China, Koreaand Taiwan. Kirin paid $5 million up front in July 1995 and agreedto contribute another $2 million during the first year. Over theremaining four years of the deal, Kirin will pay an additional $5million. The other $13 million is tied to development milestones.

Norcalcin has been tested in two Phase I trials and two Phase I/IIstudies. Results of three clinical trials demonstrated the drug is safeand decreased levels of parathyroid hormones in the blood. Analysisof the second Phase I/II study is expected later this year. Under itsagreement, Amgen will continue clinical development.

Kirin is expected to begin a Phase I trial in Japan in 1996.

NPS also has a collaboration with SmithKline Beecham plc, ofLondon, for development of calcium receptor regulators for treatmentof osteoporosis. NPS received a $3 million milestone payment fromSmithKline in January 1996. The companies are working not only tohalt bone deterioration characteristic of the disease, but also torebuild lost bone.

NPS' other drug development programs include discovery ofcompounds to protect nerve cells against damage by calcium. Theeffort targets modulation of calcium channels operated by glutamatereceptors in the brain. n

-- Charles Craig

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