NPS Pharmaceuticals Inc. is getting up to $43.5 millionfrom Amgen Inc. in a collaboration using NPS' calciumreceptor technology for treatment of hyperparathyroidism(HPT).

The lead drug from that program is Norcalcin, which is inPhase I/II trials and already partnered in Asia in aseparate deal that could bring in another $25 million toNPS. The drug would fit in nicely for Amgen, whichalready has a strong renal presence through its Epogendrug.

The companies on Thursday said they signed a bindingletter of intent. If the deal goes through as expected, NPSwill receive an initial license fee of $10 million and anequity investment of $7.5 million, or 1 million shares at7.50 each, the price the stock was trading at in Novemberwhen negotiations on the stock were initiated.

But the value of Salt Lake City-based NPS has more thandoubled since then. In fact it's doubled in the past week.NPS' stock (NASDAQ:NPSP) gained another $2.50Thursday to close at $17. It was trading at less than $9 aweek ago Thursday.

Amgen, of Thousand Oaks, Calif., will own about 12percent of the 8 million post-deal outstanding NPSshares. Another NPS collaborator, London-basedSmithKline Beecham plc, will have a stake of about 22percent after the Amgen deal. They are applying thecalcium receptor technology to osteoporosis and relatedbone and mineral disorders.

In addition to the license fee and equity investment, NPSwill receive milestones of up to $26 million and royaltieson sales. Also, Amgen will take over developmentexpenses.

Gregory Brown, vice president and senior health careanalyst at Vector Securities International Inc., ofDeerfield, Ill., said the deal with Amgen is a veryattractive one for NPS.

He said NPS is one of the few companies with productsdesigned to directly control calcium metabolism. "That'sthe attractive part and what makes this drug so unique,"Brown said.

Norcalcin is an agonist to the calcium receptor on theparathyroid gland. HPT, an age-related disorder, ischaracterized by excessive secretion of parathyroidhormones, elevating levels of serum calcium and, in somecases, bone loss, kidney disorders and cognitiveimpairment.

NPS' focus has been on developing small molecule drugstargeting ion regulators, specifically calcium ionregulators. Brown said NPS was the first company todiscover an ion receptor.

"They have defined a new class of receptor, developed anagonist and got it into the clinic in record time," Brownsaid. "To be able to model the interaction between acharged molecule and its receptor, define and clone thereceptor, then build an agonist to it and get it into clinicalstudies in about a year and a half is a feat any majorpharmaceutical company would be envious of."

An Amgen spokesman said that ability was an importantpart in the company's decision to partner with NPS.

David Kaye, Amgen's associate director of corporatecommunications, said one of the reasons Amgen alignedwith NPS is the potential to add to its renal franchise.

"The second thing is NPS is one of the foremostcompanies with expertise in small molecule technology,and that has implications for many of our productsdownstream," he said.

Norcalcin, NPS' only product in human studies, is in aPhase I multiple dosing trial, a Phase I/II trial in patientswith primary HPT, and a Phase I/II study in dialysispatients. Bob Merrell, NPS' vice president, finance, saidthe company will release results from the two non-dialysis studies next week. He said specific developmenttimelines from there would have to be worked out withAmgen.

But Brown said he expects a full Phase II study to beginearly in 1996 and a Phase III study to get under way latein the year. "They're pretty attractive timelines andshould trigger milestones from Amgen," Brown said.

Amgen has exclusive rights everywhere except Japan,China, Korea and Taiwan. Those rights are held by KirinBrewery Co. Ltd., of Tokyo, which aligned with NPS inJuly 1995. (See BioWorld Today, July 12, 1995, p. 1.)

Merrell said NPS should have about $25 million in cashafter the deal closes, enough to last the company threeyears and longer if milestone payments kick in. He saidwith partnerships in place, NPS will be able to focussome of its resources on earlier programs in the pipeline.n

-- Jim Shrine

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