Last throw of the dice for NPS Pharmaceuticals?

The two companies had worked together for six years to discover drugs that target metabotropic glutamate receptors (mGluRs) - research that has yielded several drug candidates currently in preclinical and Phase I studies. That has all come to an end now as NPS strives to keep the company going. Things haven't exactly been going to plan for NPS for over a year now. In March 2006, the US Food and Drug Administration (FDA) sent the company an approvable letter for its lead drug candidate, Preos. However, the regulators decided they wanted another clinical trial before they would approve it as although the drug is effective, it has also been shown to cause hypocalcaemia. The drug is already approved in Europe but it is marketed by Nycomed and so the FDA's decision was a serious setback for NPS. In March of this year, it decided to cut its workforce by a staggering 86 per cent - from 196 to 35 - in order to save costs. The company said at the time it planned to reduce cash burn from $113m in 2006 to around $85 to $95m in 2007 and then to $35 to $45 million in 2008. This latest move will raise more cash for them to try and push Preos towards the market. "Monetising our interests in the mGluR program at this time enables us to create greater near-term value for NPS shareholders,"​ said Dr. Tony Coles, CEO of NPS. "This strategic move creates investment flexibility for NPS and enables us to use the monies from this deal, the previously announced Nycomed Gattex deal and the approximately $10m in savings over the next two years from this transaction to support the further development of our late-stage pipeline products, Preos and Gattex." ​ Before the FDA decision, shares in NPS were riding high at $16 but have since sunk to as low as $3.5 and are currently at $5.3.