NPS Pharmaceuticals could receive up to $25 million for licensefees, research support and milestone payments from Tokyo-basedKirin Brewery Co. Ltd. in a collaboration to develop NPS' leadproduct, Norcalcin, for hyperparathyroidism.
The agreement with Kirin's pharmaceutical division, sent NPS' stock(NASDAQ:NPSP) up 25 percent, or $1.25, to close Tuesday at$6.25.
Under terms of the five-year alliance, NPS was paid $5 million upfront by Kirin and will receive another $2 million in quarterlypayments of $500,000 for research during the first year. Over theremaining four years of the collaboration, Kirin will contributeanother $5 million to support research and development.
The other $13 million is tied to milestone payments based on clinicalachievements in the U.S. and Japan.
For its part, Kirin received rights to develop and market Norcalcin inJapan, China, Korea and Taiwan. NPS retains rights to the drugelsewhere and is looking for additional corporate partners.
Norcalcin is a compound designed as an agonist to the calciumreceptor on the parathyroid gland. Hyperparathyroidism, an age-related disorder, is characterized by excessive secretion ofparathyroid hormones, elevating levels of serum calcium and, insome cases, leading to bone loss, kidney disorders and cognitiveimpairment. NPS' drug, which is in Phase I/II trials in the U.S., actsby reducing secretion of parathyroid hormones.
Bob Merrell, chief financial officer of Salt Lake City-based NPS,said the $5 million up-front payment from Kirin gives his company$11 million in cash. The company's current burn rate of between$500,000 and $600,000 is expected to increase, Merrell said, asNorcalcin progresses through clinical trials. But he added that NPShas enough resources for 15 to 18 months.
In addition to its alliance with Kirin, NPS entered an agreement in1993 with London-based SmithKline Beecham plc for developmentof NPS' calcium receptor technology for treatment of osteoporosis.Research on a potential drug is in the preclinical stage. n
-- Charles Craig
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