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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-96253
PROSPECTUS
3,900,000 Shares
[NPS PHARMACEUTICALS LOGO HERE]
Common Stock
The stockholders named on pages 18 and 19 are selling up to 3,900,000 shares
of our common stock.
Our common stock is traded on the Nasdaq Stock Market under the symbol NPSP.
On April 19, 2000 the last reported sale price of our common stock on Nasdaq
was $11.125 per share.
Before buying any shares of our common stock you should read the discussion
of material risks of investing in our common stock under the heading "Risk
Factors" beginning on page 3.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this Prospectus is April 20, 2000
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TABLE OF CONTENTS
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Page
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Risk Factors............................................................... 3
Forward-Looking Statements................................................. 9
Use of Proceeds............................................................ 9
Business................................................................... 10
Selling Stockholders....................................................... 18
Plan of Distribution....................................................... 20
Legal Matters.............................................................. 21
Experts.................................................................... 21
Where You Can Find More Information........................................ 21
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RISK FACTORS
You should carefully consider the following risk factors and warnings before
making an investment decision. Additional risks that we do not yet know of or
that we currently think are immaterial may also impair our business
operations. If any of the events or circumstances described in the following
risks actually occur, our business, financial condition, or results of
operations could be materially adversely affected. In such case, the trading
price of our common stock could decline, and you may lose all or part of your
investment.
We have a history of operating losses and may never reach profitability. We
have not been profitable since our inception in 1986. As of December 31, 1999,
we had an accumulated deficit of approximately $78.9 million. We expect to
continue to incur losses for the next several years. We may never realize
significant revenues or be profitable. Factors that will influence our
profitability include:
. the success of our product candidates placed with Amgen, Kirin,
SmithKline Beecham, Janssen, Abbott and Eli Lilly;
. the development and commercialization of additional products, especially
our most advanced non-partnered product candidates ALX1-11 and ALX-0600,
which relate to the treatment of osteoporosis and short bowel syndrome,
respectively;
. our ability to secure corporate partners to share the expense of
development of our non-partnered programs;
. the timing and difficulty of obtaining regulatory approvals; and
. competition.
If we fail to obtain additional financing to fund our operations, we will be
unable to complete development of some or all of our product candidates or
commercialization of a product. Most of our funding has come from research and
development fees and the sale of stock. We have not generated any material
revenues from product sales. We have expended and will continue to expend
significant sums to complete development of our products. Our current
resources are inadequate to finance all of the work planned and needed to
complete development of our current programs through to commercialization. We
have announced our intention to devote considerable cash resources to clinical
development. If we exceed our cost estimates, or incur costs earlier than
expected, we may have to reduce costs, delay development or seek additional
financing through collaborative relationships or public and private
financings. We may not be able to obtain additional financing on favorable
terms, if at all. If we do not obtain additional funding we may have to delay
development and commercialization of some of our programs, and we may be
forced to reduce or eliminate other programs or to relinquish rights to
technology, product candidates or products.
If we fail to maintain our existing collaborative relationships or if our
partners do not apply adequate resources to our collaborations, we may have to
reduce our rate of product development, we may not be able to achieve
profitability, and we may have to obtain other sources of revenue to complete
development of our products. Our corporate partners have full control over the
development and commercialization activities in their territories for their
respective programs. Because we have granted exclusive development,
commercialization, and marketing rights to these partners, the success of the
programs depends upon their efforts. If our partners do not satisfactorily
perform under the agreements, or if our partners terminate these agreements
before they identify lead product candidates or develop any related product
candidates, we might not have the financial resources necessary to continue
development of those programs. As a result, we would have to seek other
sources of revenue which may not be available. If we are not able to continue
to develop these programs, we might not become profitable. In addition, much
of the revenue that we may receive under these partnerships depends upon our
partners' successful development and commercialization of the products. Our
partners may develop alternative technologies or products outside of their
partnerships with us, and the alternative technologies or products may be used
to develop treatments for the diseases targeted by our partnerships.
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If we do not find corporate partners for new product candidates, we may have
to reduce our rate of product development or increase our capital
expenditures. Our strategy for the development, testing, manufacturing and
commercialization of our products requires us to enter into various
collaborations with partners, licensors, licensees, and others in order to
conserve financial resources. We may not be able to negotiate further
collaborative arrangements on acceptable terms, if at all. If we are not able
to establish additional collaborative arrangements, we will either have to
delay further development of some of our programs or increase our capital
expenditures and undertake the development activities at our own expense. We
may encounter significant delays in commercializing our products or find that
the development, manufacture or sale of our products is hindered by the
absence of collaborative agreements.
If we are not successful in acquiring rights to external technologies,
programs, and product candidates, we may not be able to maintain or expand our
product portfolio. In order to reduce our dependence on the success of the few
product candidates we now have, we are actively evaluating product acquisition
opportunities to establish and maintain an appropriate portfolio of product
candidates. We seek optimum diversity of materials, timetables, development
costs, applicability to current medical needs, and other select criteria. We
may be unsuccessful in our efforts to identify, acquire and exploit third-
party technologies or product opportunities. If we are unsuccessful in our
efforts, we will remain dependent on the success of our relatively few product
candidates.
If we fail to successfully integrate the operations of NPS and Allelix, we
may waste financial resources and we may be forced to stop or delay
development and commercialization of our products. As a result of the
acquisition of Allelix in December 1999, we must integrate two companies that
previously operated independently. We will have to coordinate each company's
efforts in research and development, business development, intellectual
property, finance, and administration to successfully integrate the two
companies. Integration will require significant efforts from each of us. We
may not be able to integrate the respective operations of NPS and Allelix
without encountering difficulties or experiencing loss of personnel, and we
may not realize the benefits we expect from the integration. If there are
difficulties, management will have to divert its attention which, when
combined with any difficulties we encounter in the transition process,
including the interruption of, or a loss of momentum in, Allelix's or our
activities and problems associated with employee uncertainty and the potential
loss of key personnel, could cause us to delay development and
commercialization of our products and result in our inefficient use of limited
corporate resources.
Our acquisition of Allelix will result in integration costs and transaction
expenses that could reduce our profitability and cause the price of our stock
to decline. If the benefits of the acquisition do not exceed the costs
associated with it, including the dilution to our stockholders resulting from
the issuance of shares of NPS common stock in connection with the acquisition
of Allelix, our financial results, including earnings per share, could
decline. We expect to incur significant costs associated with integrating the
operations of NPS and Allelix. Integration costs may include:
. elimination of duplicate operations;
. consolidation of certain administration, support, and research and
development activities; and
. increased expenditures for human trials of ALX1-11 and ALX-0600
Our actual costs of integration may substantially exceed our preliminary
estimates. In addition, we may experience unanticipated expenses associated
with integrating the two companies. We incurred a charge of $17.8 million in
the fourth quarter of 1999 to reflect our write-off of Allelix's in-process
research and development efforts. This write-off will not be accompanied by
outward cash flow, but may be seen by investors as increasing our net loss. We
may also incur additional charges in subsequent quarters to reflect costs
associated with the acquisition. As a result, our future earnings per share
may decrease.
We are subject to extensive government regulation which may cause us to
cancel or delay the introduction of our products to market. Our research and
development activities and the investigation, manufacture,
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distribution, and marketing of drug products are subject to extensive
regulation by governmental authorities in the United States and other
countries. Prior to marketing in the United States, a drug must undergo
rigorous testing and an extensive regulatory approval process implemented by
the FDA under federal law, including the Federal Food, Drug, and Cosmetic Act.
In order to receive approval, we must, among other things, satisfy the FDA
that the product is both safe and effective. Typically, the approval process
takes several years depending upon the type, complexity and novelty of the
product and the nature of the disease or other problem to be treated and
requires an expenditure of substantial resources. Drug testing is subject to
complex FDA rules and regulations, including the requirement to conduct human
testing on a large number of test subjects. We or the FDA may suspend human
trials at any time if either believes that subjects are being exposed to
unacceptable health risks.
Before we receive FDA approval to market a product, we may have to
demonstrate that the product represents an improved form of treatment when
compared to existing therapies. Data obtained from testing are susceptible to
varying interpretations that could delay, limit, or prevent regulatory
approvals of our products. In addition, we may encounter delays or rejections
from additional government regulation as a result of future legislation,
administrative action, or changes in FDA policy during the period of product
development, human trials, and FDA regulatory review. If we receive regulatory
approval of a product, the approval will be limited to those disease states
and conditions for which the product is useful, as demonstrated through
clinical studies. Furthermore, FDA approval may subject us to ongoing
requirements for post-marketing studies. Even if we obtain FDA approval, a
marketed product, its manufacturer, and its manufacturing facilities are
subject to continual or periodic review. We may discover previously unknown
problems with a product, manufacturer, or facility that may result in
restrictions on that product or manufacturer, including costly recalls or
withdrawal of the product from the market. Compounds developed by us alone or
in conjunction with others may not prove to be safe or effective in human
trials and may not meet all of the applicable regulatory requirements needed
for marketing approval.
Outside the United States, our ability to market a product is contingent
upon receiving marketing authorization from the appropriate foreign regulatory
authorities. The requirements governing the conduct of clinical trials,
marketing authorization, pricing and reimbursement vary widely from country to
country. The foreign regulatory approval process includes all of the risks
associated with FDA approval discussed above.
As a result of intense competition and technological change in the
pharmaceutical industry, the marketplace may not accept our products and we
may not be able to compete against other companies in our industry and achieve
profitability. The pharmaceutical industry is intensely competitive. Existing
and future products, therapies, and technological approaches will compete
directly with our products. Competing products may provide greater therapeutic
benefits for a specific problem or may offer comparable performance at a lower
cost. If doctors and patients do not use our products, we may not become
profitable.
We compete with fully integrated pharmaceutical companies, smaller companies
that are collaborating with larger pharmaceutical companies, academic
institutions, government agencies and other public and private research
organizations. Many of our competitors have drug products already approved or
in development and operate large, well-funded research and development
programs in these fields. Our competitors may develop safer or more effective
drugs and achieve faster or broader regulatory approval. In addition, many of
our competitors have wider availability of supply, more effective marketing
and sales and superior intellectual property positions. Any products that we
develop may become obsolete before we recover any expenses we incurred in
connection with the development of these products. As a result, we may never
achieve profitability.
If we fail to protect our intellectual property or if we infringe the
intellectual property rights of others, we may not be able to compete
effectively and we may not achieve profitability. Our ability to achieve
profitability depends, in part, on our ability to obtain and protect patents,
maintain trade secrets and operate without infringing the intellectual
property rights of others. Our competitors may challenge, invalidate, or
circumvent our patents or patent applications. These patents may also fail to
provide us with meaningful competitive advantages.
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Intellectual property rights are uncertain and involve complex legal and
factual questions, particularly with respect to biotechnology and
pharmaceutical patents. Generally, patent applications in the United States
are maintained in secrecy until patents issue, and publication of discoveries
in the scientific or patent literature often lags behind actual discoveries.
Accordingly, we cannot be certain that the inventors named in our patent
applications were the first to invent, or that we were the first to pursue
patent coverage for those inventions. We may unknowingly infringe the
intellectual property rights of others and may be liable for that
infringement, which could result in significant liability for us. Any
infringement could force us to either seek a license to intellectual property
rights of others or alter our products or processes so that they no longer
infringe the intellectual property of others. A license could be very
expensive for us to obtain, or we may not be able to obtain a license at all.
Similarly, it may be costly or impractical for us to change our products or
processes to avoid infringing the rights of others. If we become involved in a
dispute regarding intellectual property, whether ours or that of another
company, we may have to participate in interference proceedings declared by
the U.S. Patent and Trademark Office to determine who had the claimed rights
first. We may also have to seek a judicial determination concerning the rights
in question. Judicial proceedings may be costly and time consuming for us,
even if we eventually prevail. If we do not prevail, we might have to pay
significant damages, obtain a license or stop making a certain product.
We also rely on trade secrets, know-how, and confidentiality provisions in
agreements with collaborative partners, employees, and consultants to protect
our intellectual property. However, other parties may not comply with the
terms of their agreements with us and we might not be able to adequately
enforce our rights against these people, or obtain adequate compensation in
respect of the damages caused by their unauthorized disclosure.
Because we do not have internal manufacturing facilities and we rely on
third party manufacturers, we are not able to control our rate of product
development, which may delay our receipt of revenues and profitability. We do
not have any internal manufacturing capacity, and we rely on third-party
manufacturers for the manufacture of all of our products used in clinical
trials. If we are unable to contract for a sufficient supply of our products
on acceptable terms, or if we encounter delays and difficulties in our
relationships with manufacturers, we would have to delay our product testing
schedule. A delay would set back our timetable for submission of products for
regulatory approval, market introduction, and subsequent sales, and would
postpone revenues and profitability. Also, our contract manufacturers may be
unable to manufacture any products we develop in commercial quantities on a
cost effective basis. We will need to expand our existing relationships or
establish new relationships with additional third-party manufacturers for
products that we successfully develop in the future. We may be unable to
establish or maintain relationships with third-party manufacturers on
acceptable terms. Our dependence upon third parties may reduce our profit
margins and delay our ability to develop and commercialize products on a
timely and competitive basis. Furthermore, third-party manufacturers may
encounter manufacturing or quality control problems in connection with the
manufacture of our products and they may be unable to maintain the necessary
governmental licenses and approvals to continue manufacturing our products.
Because we do not have sales, marketing, and distribution capabilities, we
may not be able to market and sell our products and generate revenues. We do
not have any sales, marketing, or distribution capabilities. We will have to
develop a sales force or rely on third parties to perform these functions for
any products we develop. In order to market any products directly, we would
have to develop a marketing and sales force with technical expertise and
supporting distribution capability. We might not be able to establish in-house
sales and distribution capabilities or relationships with third parties to
accomplish these tasks, which would limit our ability to generate revenues.
Because of the uncertainty of pharmaceutical pricing, reimbursement, and
healthcare reform measures, we may be unable to sell our products profitably.
The availability of reimbursement by governmental and other third-party payors
affects the market for any pharmaceutical product. These third-party payors
continually attempt to
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contain or reduce the costs of healthcare. There have been a number of
legislative and regulatory proposals to change the healthcare system, and
further proposals are likely. Under current guidelines, Medicare does not
reimburse patients for self-administered drugs. Medicare's policy may decrease
the market for our products designed to treat patients with age-related
disorders, such as hyperparathyroidism and osteoporosis. In addition, third-
party payors are increasingly challenging the price and cost-effectiveness of
medical products and services. Significant uncertainty exists with respect to
the reimbursement status of newly approved health care products. We might not
be able to sell our products profitably if reimbursement is unavailable or
limited in scope.
If we fail to attract and retain key employees and consultants, we may have
to delay development and commercialization of our products. We are highly
dependent on the principal members of our scientific and management staff. If
we lose any of these persons, our ability to develop products and become
profitable could suffer. Nonetheless, we do not have long-term employment
contracts. Our future success will also depend in large part upon our
continued ability to attract and retain highly qualified scientific and
management personnel. We face competition for personnel from other companies,
academic institutions, government entities, and other organizations. Our
anticipated growth and expansion into areas and activities requiring
additional expertise, such as clinical trials, government approvals,
production and marketing, and general pharmaceutical company management, will
place increased demands on our personnel resources. These demands may require
us to add new management and research, development, and administrative
personnel. Our existing management and personnel may have to develop
additional expertise. If we fail to acquire additional management or personnel
with the additional expertise, or if our existing management fails to develop
such expertise, we may not be able to obtain required approval for products or
become profitable. Our agreements with our partners and any additional
corporate collaborations we may enter into may alleviate some of our need to
hire additional personnel or develop further expertise. Nevertheless, we may
find that services provided by them are insufficient to meet our personnel or
management needs.
If product liability claims are brought against us, we may incur substantial
liabilities which could reduce our financial resources. The testing and
commercial use of pharmaceutical products entails significant exposure to
product liability claims. If we succeed in developing products, the use of our
products in clinical trials and the sale of our products following regulatory
approval may expose us to product liability claims. These claims might be made
directly by consumers or others. We have obtained limited product liability
insurance coverage for our clinical trials on humans. This coverage may be
insufficient to protect us against product liability damages. We might not be
able to obtain or maintain product liability insurance in the future on
acceptable terms or in sufficient amounts to protect us against product
liability damages. We are entitled to indemnification under agreements with
our partners and licensees against damage claims, but claims arising from
products sold by a collaborative partner or licensee may also include claims
directly against us and may not be indemnifiable under the agreement. If we
are required to pay a product liability claim, we may not have sufficient
financial resources to complete development or commercialization of any of our
products.
Our operations involve hazardous materials and we must comply with
environmental laws and regulations, which can be expensive and restrict how we
do business. Our research and development activities involve the controlled
use of hazardous materials, radioactive compounds, and other potentially
dangerous chemicals and biological agents. Although we believe that our safety
procedures for these materials comply with governmental standards, we cannot
eliminate the risk of accidental contamination or injury from these materials.
If an accident or environmental discharge occurs, we could be held liable for
any resulting damages, which could exceed our financial resources. We disposed
radioactive waste at a site in Denver, Colorado, which is currently in
remediation. Although we were a small contributor to the site and there are a
number of other financially responsible contributors, we may be held liable
for all or a portion of the clean-up cost or any other costs or damages
associated with this disposal site.
Our stock price has been and may continue to be volatile and your investment
could suffer a decline in value. You should consider an investment in our
stock as risky and invest only if you can withstand a significant loss and
wide fluctuations in market value of your investment. We receive little
attention by securities analysts
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and frequently experience an imbalance between supply and demand for our
stock. The market price of our common stock has been highly volatile and is
likely to continue to be volatile. Factors affecting our stock price include:
. fluctuations in our operating results;
. announcements of technological innovations or new commercial
pharmaceutical products by us or our competitors;
. published reports by securities analysts;
. progress with clinical trials;
. governmental regulation;
. changes in reimbursement policies;
. developments in patent or other intellectual property rights;
. publicity concerning the discovery and development activities by our
licensees;
. public concern as to the safety and efficacy of drugs developed by us
and our competitors; and
. general market conditions.
When we issue shares of our common stock under employee stock incentive
plans or in connection with public or private financings, we will dilute the
stockholdings of current stockholders and reduce future earnings per share. We
maintain stock incentive plans through which employees, directors, and
consultants can acquire shares of our common stock through the exercise of
stock options, grants, and purchases. Shares we issue under these plans or in
connection with public or private financings may dilute the holdings of
current stockholders and reduce earnings per share in the future.
Antitakeover provisions in our articles, bylaws, shareholders rights plan
and under Delaware Law may discourage someone from acquiring us, and may
prevent a stockholder from receiving a favorable price for his or her shares.
Provisions of our certificate of incorporation and bylaws and Section 203 of
the Delaware General Corporation Law could discourage potential acquisition
proposals and could delay or prevent a change in control of our company. In
addition, our Board of Directors, without further stockholder approval, may
issue preferred stock that could delay or prevent a change in control of our
company as well as reduce the voting power of the holders of common stock,
even to the extent of losing control to others. In addition, our Board of
Directors has adopted a shareholder rights plan, commonly known as a "poison
pill," that may delay or prevent a change in control. These provisions could
diminish the opportunities for a stockholder to participate in tender offers,
including those at a price above the then-current market value of our common
stock. In addition, these provisions may also inhibit fluctuations in the
market price of our common stock that could result from takeover attempts.
We have never paid cash dividends on our common stock. We intend to retain
any future earnings to finance the growth and development of our business, and
we do not plan to pay cash dividends in the foreseeable future. As a result,
stockholders should not expect to receive cash from holding our common stock.
Unexpected Year 2000 related problems could still arise and, if significant,
could delay our development of products and reduce our available financial
resources. During 1999, we planned, inventoried, and evaluated our systems,
and remediated, replaced, and tested such remediation and replacements as
necessary. We used internal information systems technology personnel and other
personnel. As a result, we experienced no year 2000 related issues on January
1, 2000. However, we recognize that there may be residual effects related to
year 2000 issues. We do not have any way to assess the costs related to
remediation of such residual issues. We may in the future identify a
significant internal or external year 2000 residual issue which, if not
remedied in a timely manner, could require us to spend significant resources.
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FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements concerning our
operations, economic performance and financial condition, including, in
particular, our business strategy and means to implement the strategy, our
goals, the markets we intend to compete in and the likelihood of our success
in developing and expanding our business. These statements are based on a
number of assumptions and estimates which are inherently subject to
significant risks and uncertainties, many of which are beyond our control and
reflect future business conditions which are subject to change. A variety of
factors, some of which are described under "Risk Factors" in this prospectus,
could cause actual results to differ materially from those anticipated and
reflected in our forward-looking statements.
Consequently, all of the forward-looking statements made or incorporated by
reference in this prospectus are qualified by these cautionary statements, and
you are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis, judgment, belief or
expectation only as of the date of this prospectus. We undertake no obligation
to publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date of this prospectus or to publicly
release the results of any revisions to the forward-looking statements that
may be made to reflect events or circumstances after the date of this
prospectus. In addition to the disclosure contained in this prospectus, you
should carefully review any disclosure of risks and uncertainties contained in
other documents we file or have filed from time to time with the Securities
and Exchange Commission according to the Securities Exchange Act of 1934.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling stockholders.
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BUSINESS
Overview
NPS Pharmaceuticals, Inc. is a biopharmaceutical company with headquarters
in Salt Lake City, Utah, and additional operations in Toronto (Mississauga),
Ontario, Canada. We conduct our operations in Canada under the name "NPS
Allelix Corp." We engage in drug discovery and development of small, orally
active drug products and recombinant peptides. We use a blend of partnered
initiatives and internal efforts to fund and pursue our discovery, development
and marketing efforts.
On December 23, 1999 we acquired Allelix Biopharmaceuticals Inc., a
biopharmaceutical company based in Ontario, Canada. Under the arrangement,
Allelix shareholders who were U.S. residents received NPS common shares.
Allelix shareholders who were Canadian residents could elect to receive either
NPS common shares or shares of NPS Allelix Inc., the Canadian parent of NPS
Allelix Corp. and a subsidiary of NPS that are exchangeable one for one into
NPS common shares. The exchangeable shares are, as nearly as practicable, the
functional and economic equivalent of NPS common shares. NPS common shares
trade on Nasdaq under the symbol "NPSP", while shares of NPS Allelix Inc.,
which mirror the NPS common shares, trade on The Toronto Stock Exchange under
the symbol "NX".
At the conclusion of the acquisition the name of Allelix Biopharmaceuticals
was changed to NPS Allelix Corp. The discussion contained in this section
reflects the combined company and does not distinguish between what was
formerly NPS's business and what was formerly Allelix's business. References
to "us," "we" or "NPS" refer to the combined company.
We are engaged in the discovery and development of human pharmaceuticals
that are intended to address a variety of important diseases. Our most
advanced programs focus on the development of human pharmaceuticals for the
treatment of hyperparathyroidism and osteoporosis. We also have ongoing
development efforts for drugs to treat gastrointestinal disorders and
disorders of the central nervous system, including neuroprotection in stroke
and head trauma as well as epilepsy and bipolar disorder. In addition, we are
pursuing several discovery programs that are extensions of our research on
calcium receptors and ion channels, and we periodically consider other product
candidates in later stages of development for potential in-license or
collaboration opportunities.
We currently have three products in late-stage human trials: a second
generation calcimimetic for hyperparathyroidism; ALX1-11, a form of
recombinant human parathyroid hormone for osteoporosis; and ALX-0600 for short
bowel syndrome and intestinal atrophy due to chemotherapy treatment.
We have partnered with Amgen Inc. and Kirin Brewery Company, Ltd. in our
calcimimetic program for hyperparathyroidism. Calcimimetics are small
molecules that stimulate calcium receptors on parathyroid cells to regulate
the secretion of parathyroid hormone. Amgen is currently conducting Phase II
safety and efficacy trials under the calcimimetic program. The
hyperparathyroidism program arose from our pioneering work on a cell surface
receptor, termed the "calcium receptor." This receptor senses levels of
extracellular calcium and plays a key role in regulating the amount of calcium
in the bloodstream.
We are approaching osteoporosis on two fronts: development of injectable
recombinant parathyroid hormone and development of small molecule
therapeutics. We are preparing to start Phase III clinical trials with ALX1-11
in which we will evaluate safety and efficacy on a large scale. We also have a
collaboration with SmithKline Beecham centered on discovery and development of
small molecules active at the calcium receptor of parathyroid tissue for the
treatment of osteoporosis.
Our efforts to develop therapeutics to treat gastrointestinal disorders are
focused on the development of ALX-0600. This product is an analog of the
natural peptide hormone, glucagon-like peptide-2, which we believe has
significantly enhanced biological activity.
Our most advanced central nervous system programs focus on neuroprotection,
epilepsy and bipolar disorder and migraine. Our neuroprotection program is
based on our work on small molecules with novel activity
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on a cell receptor on brain cells referred to as the N-methyl-D-aspartate
subtype of glutamate receptor-operated calcium channels. This technology forms
the basis for our neuroprotection program for ischemic stroke and head trauma.
We have completed Phase I safety studies and are seeking a development partner
before proceeding further. The epilepsy/bipolar disorder program is based on
our work on small molecules that are chemically related to valproic acid but
are structurally distinct and have different biological properties. We have
conducted Phase I safety trials in humans with NPS 1776, our lead product
candidate. We have licensed the rights to this program to Abbott Laboratories
who will now assume full responsibility for the development and
commercialization of NPS 1776. The migraine program focuses on our search for
products that are selective for specific cell receptors on human blood vessels
and are hypothesized to reduce serious side effects of other current migraine
drugs. We have conducted a Phase I safety study with the lead product
candidate and are actively seeking a development partner to further the
migraine program.
Clinical Development Programs and Partnered Preclincal Programs
The following chart summarizes the status of our clinical development
programs and partnered clinical programs:
<TABLE>
<CAPTION>
Development Program Compound Classification Status(1) Commercial Rights
- ------------------- -------- -------------- --------- -----------------
<S> <C> <C> <C> <C>
Hyperparathyroidism
Primary Calcimimetics Parathyroid hormone release Phase II Amgen, Kirin
inhibitors
Secondary Calcimimetics Parathyroid hormone release Phase II Amgen, Kirin
inhibitors
Osteoporosis
Increased bone mineral ALX1-11 Recombinant humanparathyroid Phase III NPS
density and fracture hormone (injectable)
reduction
Increased bone mineral Calcilytics Endogenous parathyroid Preclinical SmithKline, NPS
density and fracture hormone release stimulators
reduction (oral)
Gastrointestinal
Disorders
Short bowel syndrome ALX-0600 Glucagon-like peptide 2 Phase II NPS
analog
Central Nervous System
Disorders
Stroke, head trauma NPS 1506 methyl-D-aspartate receptor Phase Ib NPS
antagonists
Epilepsy, Bipolar NPS 1776 Valproic acid substitute Phase Ib Abbott
Disorder
Migraine ALX 0646 5HT--Selective agonist Phase I NPS
</TABLE>
- --------
(1) Preclinical means that a product is undergoing efficacy and safety
evaluation in laboratory testing and animal testing in preparation for
clinical trials. Phase I-III clinical trials denote safety and efficacy
tests in humans as follows:
. Phase I: Evaluation of safety and dosing at several doses in healthy
volunteers.
. Phase Ib: Additional evaluation of safety and dosing tolerability at
several doses in healthy volunteers.
. Phase II: Evaluation of safety, dosing, efficacy, and tolerability at
several doses in patients having the target disease or disorder.
. Phase III: Larger scale evaluation of safety and efficacy in patients
having the target disease or disorder.
Hyperparathyroidism Program
Overview. Hyperparathyroidism is typically characterized as being either
primary or secondary. Primary hyperparathyroidism is an age-related disorder
that results from excessive secretion of parathyroid hormone. Parathyroid
hormone acts in the kidney and on bone to elevate the levels of calcium in the
blood. Symptoms of primary hyperparathyroidism may include bone loss, muscle
weakness, depression, and cognitive dysfunction. There are currently no
pharmaceutical therapies for the treatment of primary hyperparathyroidism. In
severe cases, surgical removal of the affected parathyroid gland from the neck
region is the only effective treatment.
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Secondary hyperparathyroidism results from other disease states and is most
often associated with renal failure. Symptoms of secondary hyperparathyroidism
include excessive bone loss, bone pain, and chronic, severe itching. Secondary
hyperparathyroidism affects the vast majority of dialysis patients. Studies
have shown that secondary hyperparathyroidism develops early in the course of
renal failure, before patients start dialysis. Current treatments for
secondary hyperparathyroidism address the disease indirectly and involve drug
therapy with phosphate binders and/or Vitamin D. We believe that these
therapies have certain disadvantages. For example, phosphate binders are not
well tolerated by many people and calcitriol often leads to hypercalcemia and
hyperphosphatemia, which can exacerbate the underlying disease and in many
patients is ineffective. In severe cases, surgery may be required to remove
all or some of the parathyroid glands.
Calcimimetics
The results of preclinical and human clinical trials conducted by us, Kirin,
and Amgen have indicated that calcimimetic compounds could be effective in
treating both types of hyperparathyroidism. We have entered into agreements
with Amgen and Kirin relating to the development and commercialization of
these calcimimetic compounds for treating hyperparathyroidism.
Development Status. Amgen began Phase II dosing and safety trials in primary
and in secondary hyperparathyroidism in 1998 with a second generation compound
licensed from us. These trials are presently ongoing. In 1998, Amgen completed
a Phase I safety trial of this second generation compound. Early in the
calcimimetic program, we conducted a series of trials with a first generation
calcimimetic. These trials included two Phase I safety and tolerance studies,
a multisite Phase I/II study in women with mild, primary hyperparathyroidism
and a pilot Phase I/II study in kidney dialysis patients with secondary
hyperparathyroidism. Kirin has conducted clinical trials for the first
generation calcimimetic in Japan, including a Phase I/II study in dialysis
patients with secondary hyperparathyroidism. We believe the second-generation
compound has a more favorable metabolic and kinetic profile than the first
generation calcimimetic in the hyperparathyroidism patient population. Kirin
is also developing the second generation compound. Amgen's and Kirin's
clinical trials may not, however, proceed as indicated and no product for the
treatment of hyperparathyroidism may prove safe and effective, meet applicable
regulatory standards, or be successfully marketed. Amgen and Kirin are
obligated to pay us royalties and milestone payments for the use and sale of
calcimimetics.
Osteoporosis Program
Overview. Osteoporosis is characterized by a loss of bone mass and bone
mineral density which increases the risk of fractures. Experts believe
osteoporosis affects more than 200 million people worldwide. In women, this
condition typically occurs after menopause and the complications from the
resulting fractures can lead to hospitalization and death. Approximately 20%
of osteoporosis patients are male.
Demographic studies have shown that 50% of women over the age of 50 will
suffer an osteoporosis-related fracture during their lifetime. In North
America, 1.5 million individuals sustain a fracture related to this disease
each year, including 300,000 hip fractures, resulting in a significant
economic burden on the health care system. The National Osteoporosis
Foundation in the United States estimates that a woman's risk of suffering a
hip fracture is equal to her combined risk of developing breast, uterine and
ovarian cancer. The National Institutes of Health estimate that, on a
worldwide basis, more than 200 million people suffer from reduced bone mass,
which contributes to more than 4 million fractures annually. Mortality in the
first year following a hip fracture is 15% to 20%. The successful treatment of
osteoporosis would result in the reduction of bone fractures, significantly
improving quality of life and reducing health care costs associated with
treatment and chronic care.
Traditional treatments for osteoporosis include calcium supplements, Vitamin
D compounds, estrogen replacement therapy, calcitonin, diet and exercise. In
addition, a class of drugs known as bisphosphonates has been developed which
slows the resorption of bone and, over several years, can increase bone mass
by amounts ranging from 3% to 8%. Alendronate, marketed by Merck and Co., Inc.
under the brand name Fosamax, is the
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most recently approved bisphosphonate and has demonstrated an increase in bone
mineral density of 8% over three years and a reduction in the incidence of
bone fractures by 50%. However, there is a widely recognized need among health
care professionals for a treatment that can prevent fractures by more rapidly
replacing lost bone. We believe that ALX1-11, may address this need. If
approved for commercial sale, ALX1-11 would be positioned as a therapy for
postmenopausal osteoporosis in patients who either have suffered a fracture
due to osteoporosis or have been diagnosed as having significantly decreased
bone mass, and, as a result, are at increased risk for a bone fracture.
ALX1-11
We are developing ALX1-11, an injectable form of recombinant human
parathyroid hormone, as a treatment for postmenopausal osteoporosis.
Parathyroid hormone plays an important role in the regulation of bone mineral
metabolism in the body. Recently published studies have shown that parathyroid
hormone has a marked stimulatory effect on new bone formation in animals when
administered as a single daily injection. Furthermore, several clinical
investigators have demonstrated in independent studies that a fragment of the
parathyroid hormone molecule enhances bone formation in humans. We believe
that these results, published over the past 20 years, suggest that parathyroid
hormone is able to reverse bone loss in people who suffer from osteoporosis.
We also believe that parathyroid hormone increases the number of bone-forming
cells and may also increase the activity of such cells. We confirmed the
increase in bone density observed in earlier studies in a Phase II safety and
efficacy trial. ALX1-11 may represent a significant treatment alternative for
osteoporosis sufferers.
Development Status. In 1994, we conducted a Phase I clinical trial in The
Netherlands that demonstrated the safety of ALX1-11 in humans. We initiated
the Phase II clinical trial for ALX1-11 in June 1995 in 18 centers throughout
Canada and the United States. The trial involved over 200 women suffering from
postmenopausal osteoporosis. The trial was a double blind, placebo-controlled,
dose-ranging safety and efficacy study and the course of treatment was 12
months. Patients self-administered one of three different dosages of ALX1-11
or a placebo by injection under the skin in a manner similar to self-
administered daily insulin injections by diabetics. The goal of the clinical
trial was to compare the relative effectiveness of the three dose levels on
spinal bone mineral density. Blood samples were taken in the clinical trial to
monitor the effects of the drug on several biochemical markers of bone growth
and bone metabolism.
In June 1996, we entered into a collaboration agreement with Astra AB for
the development and commercialization of ALX1-11 for osteoporosis. We
completed the Phase II trial in February 1997. The results of the Phase II
study demonstrated an average increase in bone mineral density of nearly 7% in
the spine over the twelve month period of the study. The final report was
submitted to Astra AB in June 1997 and Astra AB conveyed to us its decision to
conduct a Phase III trial with ALX1-11 in September 1997. In September 1998,
Astra notified us that it would return all of the assets associated with the
program and all related intellectual property rights to us at no cost and paid
a cancellation penalty.
We intend to begin a Phase III safety and efficacy trial with ALX1-11 in the
U.S. and Canada in the first half of 2000. The Phase III study design will be
based on a double blind, placebo-controlled study for measuring increases in
bone mineral density and reductions in clinical fractures.
Since parathyroid hormone is a protein, it must be administered by
subcutaneous injection at the present time. We believe there is at least one
other company testing an injectable formulation of a drug candidate similar to
ALX1-11. Alternative routes of administration such as inhalation, intranasal
or transdermal may be feasible. A number of companies are investigating
alternative routes of administration for a variety of peptides. In particular,
insulin has been shown to be absorbed by the inhalation route and calcitonin
is commercially available in an intranasal form. We believe that there is at
least one company working on an inhalation form of parathyroid hormone. We do
not know the feasibility of administering parathyroid hormone by one of these
other routes.
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SmithKline Beecham Collaboration
In conjunction with SmithKline Beecham, we are also pursuing a treatment of
osteoporosis focusing on small molecule drugs called calcilytic compounds
that, in contrast to calcimimetic compounds, stimulate parathyroid hormone
secretion. This novel approach, which is intended to manipulate the body's own
parathyroid hormone reserves, could provide an effective anabolic therapy for
osteoporosis by stimulating new bone formation and replacing bone that has
been lost to the disease.
While chronically high levels of parathyroid hormone are known to cause bone
loss, parathyroid hormone levels fluctuate daily and we think this plays a key
role in regulating the balance between bone resorption and bone formation.
Recent studies by us in animals and in humans have shown that daily injections
of exogenous parathyroid hormone are sufficient to cause a transient increase
in circulating parathyroid hormone levels, resulting in significant
stimulation of new bone formation. Animal studies have evaluated the
structural integrity of this newly formed bone and have found that the
increases in bone mass achieved with parathyroid hormone injections are
accompanied by improvements in biomechanical strength and in certain indices
of bone structure thought to be related to biomechanical strength.
In studies on animals, our scientists, together with SmithKline Beecham,
have demonstrated that intermittent increases in circulating levels of
parathyroid hormone can be obtained through the use of small molecules which
act as calcimimetics. Increased levels of parathyroid hormone achieved by this
mechanism are equivalent to levels of parathyroid hormone achieved by an
injection of parathyroid hormone sufficient to cause bone growth. We believe
that orally administered, calcilytic drugs will act on the parathyroid cell
calcium receptor and will increase parathyroid hormone release from the body's
own parathyroid hormone reserves. Calcilytic drugs could provide a cost-
effective means of intermittently increasing parathyroid hormone levels.
Preclinical Research Status. In January 1996, we received the first
milestone payment of $3.0 million from SmithKline Beecham for progress made in
our osteoporosis collaboration. Medicinal chemistry efforts are being applied
to various lead compounds with the goal of identifying product candidates. We
have produced a cell line that expresses the human parathyroid calcium
receptor and that serves as a tool for the high throughput screening of
compounds to identify new drug candidates. We continue to screen SmithKline
Beecham and our compound libraries to discover, identify, and characterize
additional compounds with calcilytic activity. We are also involved with
SmithKline Beecham in medicinal chemistry efforts to optimize compound leads
obtained from our screening activities. We are not certain that lead compounds
will be identified, that development activities will proceed, or that these
candidates will prove safe or effective, meet applicable regulatory standards,
or be successfully marketed.
Gastrointestinal Disorders
Short Bowel Syndrome
Approximately 20,000 to 40,000 patients in North America have undergone
surgical removal of a portion of the small intestine because of
gastrointestinal problems that cause the intestine to malfunction. Patients
with this condition often do not have enough small intestine remaining after
removal to allow for the absorption of sufficient nutrients from the diet
since the epithelium of the small intestine is the primary site of nutrient
absorption. This results in a condition known as short bowel syndrome. There
are currently no effective therapies available for enhancing the growth and
repair of the small intestine epithelium. In extreme cases, the remaining
intestine is no longer able to perform its normal function of transporting
vital nutrients into the blood stream. Patients with severely impaired
intestinal function caused by short bowel syndrome often must be fed
intravenously by a technique called total parenteral nutrition for a period of
time and, in some cases, permanently. Total parenteral nutrition costs can
exceed $100,000 annually per patient.
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ALX-0600
We are currently developing ALX-0600. This drug candidate is an analog of
Glucagon-Like Peptide-2, a naturally occurring hormone having 33 amino acids.
We are developing ALX-0600 for the treatment of short bowel syndrome. A
published study by one of our academic collaborators demonstrated that the use
of ALX-0600 in animals resulted in a marked stimulatory effect on the rate of
growth of epithelial cells lining the small intestine. In this study, ALX-0600
induced an approximately 50% increase in weight of small intestine epithelium
within ten days of administration. We believe that ALX-0600 may have the
ability to induce a similar effect in humans. Furthermore, the growth-
promoting properties of ALX-0600 appear to be highly tissue-specific,
predominantly affecting the small intestine, and thereby reducing the risk of
adverse side effects.
We are presently conducting a Phase II safety and efficacy study with ALX-
0600 in patients with short bowel syndrome. In November 1999, we entered into
an agreement with the Canadian government through a program known as
Technology Partnerships Canada. Under the agreement, the Canadian government
will reimburse us up to $8.4 million (Cdn) for qualified costs related to
research and development of ALX-0600. As a result of the funding, we will pay
a royalty to the Canadian government on the sale or license of any product
developed from the funded research.
We are also investigating the use of ALX-0600 for the replenishment of
epithelial cells of the small intestine which are damaged by chemotherapy
treatment for cancer. ALX-0600 may be suitable as an adjunct therapy to cancer
chemotherapy if it can ameliorate the toxic gastrointestinal side effects of
cancer chemotherapy, thereby improving patient compliance with the
chemotherapy regimen and possibly allowing for dose escalation of the
chemotherapy agent. The patients that would benefit from such an adjunctive
therapy are those patients receiving 5-fluorouracil, administered to
approximately 1 million patients per year, or CPT-11, administered to
approximately 500,000 patients per year and increasing. Approximately 16% and
50% of patients receiving these respective therapies experience extreme
gastrointestinal side effects sufficient to warrant treatment with an agent
such as ALX-0600, should its safety and efficacy be proven in clinical trials.
We licensed the rights to ALX-0600 from an academic collaborator who is
entitled to participate in the proceeds of commercialization of the product
candidates, if successfully developed and approved. We completed a Phase I
clinical trial of ALX-0600 in healthy subjects in November 1998. We are
developing a recombinant production system that may be used to produce the
product.
Central Nervous System Disorders
Neuroprotection Program: NPS 1506
Overview. Stroke is the third leading cause of death in the United States,
with over 500,000 cases reported each year. In stroke, a blood vessel becomes
blocked, which leads to inadequate blood supply to the brain, a condition
sometimes referred to as ischemia. Many stroke victims survive and
approximately 100,000 to 150,000 per year are left severely and permanently
disabled by nerve damage resulting from stroke. Much of this damage occurs
within the first 24 to 48 hours after the stroke and is caused in part by the
excessive release of glutamate and the resultant influx of calcium into nerve
cells. Published research in animals has shown that much of this damage can be
prevented by blocking the influx of calcium into cells, particularly the
influx that results from activation of N-methyl-D-aspartate receptor-operated
calcium channels. Calcium influx resulting from the activation of these
channels also appears to cause the neuronal damage associated with head
trauma. Approximately two million traumatic brain injuries occur each year in
the United States, with 25% of these injuries requiring hospitalization, and
about 1% resulting in death.
Certain medical procedures are associated with an increased risk of stroke.
For example, strokes occur in 3% to 7% of coronary artery bypass, carotid
endarterectomy, and heart valve replacement surgeries. Mild to severe central
nervous system dysfunction occurs in up to 80% of these procedures.
Researchers think this results from multiple micro strokes caused by the
release of numerous tiny blood clots into the bloodstream. Our
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<PAGE>
research indicates that it might be possible to lessen the severity of
neuronal damage and cognitive impairment that occurs as a result of these
procedures by using a prophylactic treatment with neuroprotective compounds.
N-methyl-D-aspartate receptor-operated calcium channels play critical roles
in normal excitatory neurotransmission and in events that lead to much of the
neurological damage associated with stroke and head trauma. Several
pharmaceutical companies have recognized the potential of these receptor-
operated calcium channels as molecular targets. These companies have begun
development of drugs to treat neurological disorders and have identified
various lead compounds. However, no such drug has successfully completed
clinical trials or been marketed. Work in this field is all the more
challenging because these receptor-operated calcium channels are also the site
of action of phencyclidine, often referred to as PCP or angel dust, and most
clinically tested compounds that target these calcium channels exhibit
undesirable phencyclidine-like side effects inducing symptoms of psychosis.
There are currently no safe or effective neuroprotective therapeutics
available that slow or stop the progression of brain damage once a stroke or
head trauma has occurred.
We have demonstrated significant neuroprotectant activity in certain animal
models of ischemic stroke and head trauma through systemic administration of
our class of lead compounds, particularly NPS 1506. In these animal studies,
we still observed significant neuroprotectant activity when administration of
the compound was delayed for two hours following the ischemic event. In
addition, our compounds have not exhibited phencyclidine-like side effects in
a variety of studies in animal models intended to identify those effects.
Development Status. In July 1997, we began a Phase I clinical trial for NPS
1506 in healthy male volunteers. This trial was completed in early 1998.
Results of the trial indicated that the drug was safe and well tolerated. In
addition, we began a Phase Ib study in patients who have suffered a stroke
within a 48-hour period to assess safety and tolerability of the drug in
stroke patients. The clinical phase of this trial has been completed and we
are evaluating the data. We are currently searching for a corporate partner to
participate in the development of this program. Our ability to secure a
development partner for this program will affect our development plan and time
line for this program. There is risk that NPS 1506 and any other lead
compounds will not advance through clinical development, will not prove to be
safe or effective, will not meet applicable regulatory standards, or will not
be successfully marketed.
Epilepsy and Bipolar Disorder: NPS 1776
Overview-Epilepsy. Many types of epileptic seizures have been medically
defined. They range from mild cases of nearly imperceptible behavior, such as
staring into space, to dramatic "grand mal" seizures where consciousness is
lost and the body convulses uncontrollably. In most cases of recurrent
seizures, drugs are the treatment of choice, although in some extreme
instances, neurosurgery may be an option. The most frequently used drug
therapies include carbamazepine, phenytoin, valproate, barbiturates, and
benzodiazepines. Roughly half of all epilepsy patients can control their
seizures with available chemical therapies. However, other patients achieve
less than adequate control. An estimated 15% of all patients are virtually
resistant to drug treatment. Even when some level of seizure control is
achieved, it often comes with the disadvantage of serious side effects.
Overview-Bipolar Disorder. Bipolar disorder is part of a class of diseases
referred to as affective illnesses or mood disorders. Affective illnesses
include all forms of depression, dysthmia or chronic, moderate depression,
manic disease, and bipolar disorder. The most responsive disease in this class
of illnesses is bipolar disorder. Until recently, bipolar disorder was known
as manic-depressive disorder. It is characterized by the occurrence of both
manic and depressive states, usually in alternation. Bipolar disorder, like
other mood disorders, is a lifetime illness with no known cure. As a result,
the number of bipolar patients continue to increase each year. In the United
States, approximately 17.5 million people have affective disorders. Of these,
approximately 2.2 million to 2.6 million people have been diagnosed as having
bipolar disorder.
Development Status. Our scientists have identified a lead compound for the
treatment of epilepsy. Our studies of this small, organic molecule, designated
NPS 1776, show that it is effective in a number of animal models of epilepsy
and that, importantly, there appears to be a wide margin between doses that
control seizures
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and doses that produce side effects. The compound also exhibited a high margin
of safety in animal models when compared to standard epilepsy treatments,
including valproate, as measured by a lack of motor impairment side effects
following drug administration. Recent research studies by others have
indicated that some drugs normally used in seizure control can offer hope for
many bipolar disorder patients. Valproic acid, for example, has received FDA
approval for the treatment of manic episodes in bipolar disorder. NPS 1776 has
the same broad spectrum of pharmacological activity in animal tests as
valproic acid. Thus, we believe that NPS 1776 may be useful for the treatment
of affective mood disorders such as bipolar disorder and for the treatment of
epilepsy. However, we conducted specific studies that led us to believe that
NPS 1776 has significant structural distinctions that will provide a better
safety profile in comparison to valproic acid, such as the lack of birth
defect potential and reduced risk of liver damage.
We completed a Phase I clinical trial in healthy male volunteers in December
1998 in the United Kingdom. The purpose of the trial was to evaluate the
safety and pharmacokinetics of NPS 1776. Our preliminary analysis of the data
indicates that the drug was safe and well tolerated. We commenced a Phase Ib
study in the United Kingdom in December 1998 to confirm safety and
tolerability in volunteers receiving multiple doses of the drug. In March
2000, we entered into an agreement with Abbott Laboratories in which we
granted to Abbott Laboratories the worldwide exclusive right to make, use and
sell NPS 1776 in return for Abbott Laboratories' commitment to fund the
further development of NPS 1776 and pay to us milestone payments and royalties
on future sales of NPS 1776. Future development of NPS 1776 will be dependent
on the progress made by Abbott Laboratories in its development efforts. There
is a risk that NPS 1776 will not advance through clinical development, will
not prove safe or effective, will not meet applicable regulatory standards, or
will not be successfully marketed.
Other Programs.
We also have other early stage programs. For example, in the field of
migraine we have completed a phase Ia trial in the United Kingdom on a
compound for which we are seeking a development partner. We are also working
with Janssen Pharmaceutica N.V. to identify prospective drug candidates for
schizophrenia and dementia. We continue to work with Eli Lilly to identify
excitatory amino acid receptors as therapeutic targets for various central
nervous system disorders. Finally, we have made advances in the elucidation of
the neurophysiological roles of metabotropic glutamate receptors. Our
scientists have cloned a novel metabotropic glutamate receptor located in the
brain and thought to be linked to several central nervous system disorders. We
have developed a screening technology for identifying molecules active at this
receptor and at other metabotropic glutamate receptor subtypes, and in fact we
have had success in identifying such molecules.
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<PAGE>
SELLING STOCKHOLDERS
We are registering all 3,900,000 shares covered by this prospectus on behalf
of the selling stockholders named in the table below. We issued all of the
shares to the selling stockholders in a private placement transaction. We have
registered the shares to permit the selling stockholders and their pledgees,
donees, transferees or other successors-in-interest that receive their shares
from a selling stockholder as a gift, partnership distribution or other non-
sale related transfer after the date of this prospectus to resell the shares
when they deem appropriate.
The following table lists the name of each of the selling stockholders, the
number of shares of our common stock owned by each of the selling
stockholders, the number of shares that may be offered under this prospectus,
and the number of shares owned by each of the selling stockholders as of
February 3, 2000, the number of shares that may be offered under this
prospectus and the number of shares that will be owned by each of the selling
stockholders after this offering is completed. Except as indicated in the
table below, none of the selling stockholders has had a material relationship
with us within the past three years other than as a result of the ownership of
the shares or other securities of NPS. The number of shares in the column
"Number of Shares Being Offered" represents all of the shares that each
selling stockholder may offer under this prospectus. We do not know how long
the selling stockholders will hold the shares before selling them and we
currently have no agreements, arrangements or understandings with any of the
selling stockholders regarding the sale of any of the shares. The shares
offered under this prospectus may be offered from time to time by the selling
stockholders named below.
<TABLE>
<CAPTION>
Shares Beneficially
Owned Prior
to Offering
----------------------Number of Shares Shares Beneficially
Name of Selling Stockholder Number Percent Being Offered Owned After Offering
- --------------------------- ----------- -------------------------- --------------------
<S> <C> <C> <C> <C>
AIM Global Fund Inc..... 84,000 * 84,000 --
AIM Global Health
Sciences Fund.......... 168,000 * 168,000 --
Aries Domestic Fund II,
L.P.................... 2,569 * 2,569 --
Aries Domestic Fund,
L.P.................... 15,241 * 15,241 --
Ashton Partners,
L.L.C.................. 10,000 * 10,000 --
BayStar Capital, L.P.... 150,000 * 150,000 --
BayStar International,
Ltd.................... 50,000 * 50,000 --
Bershaw & Co., c/o
Citibank Canada........ 20,000 * 20,000 --
Caduceus Capital II,
L.P.................... 23,000 * 23,000 --
Casurina Limited
Partnership............ 20,000 * 20,000 --
Clarion Partners, L.P... 14,400 * 14,400 --
Clarion Offshore Fund
Ltd.................... 5,600 * 5,600 --
EGM Medical Technology
Fund LP................ 14,000 * 14,000 --
EGM Medical Technology
Offshore Fund.......... 11,000 * 11,000 --
Goldfischer, Carl....... 10,000 * 10,000 --
Invesco Global Health
Sciences Fund.......... 263,000 1.1 263,000 --
Invesco Health Sciences
Fund................... 596,700 2.5 596,700 --
Invesco Small Company
Growth Fund............ 141,350 * 141,350 --
Invesco VIF--Health
Sciences Fund.......... 13,300 * 13,300 --
Invesco VIF--Small
Company Growth Fund.... 850 * 850 --
IRT Small Company Growth
Fund................... 3,600 * 3,600 --
Janus Investment Fund... 850,000 3.6 850,000 --
Kelly, James C.......... 10,000 * 10,000 --
Maxim Invesco Small-Cap
Growth Portfolio....... 29,200 * 29,200 --
MCP Global Corp., Ltd... 25,000 * 25,000 --
Meriken Nominees Ltd.... 15,000 * 15,000 --
Merlin BioMed
International.......... 60,000 * 60,000 --
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially
Owned Prior
to Offering
----------------------Number of Shares Shares Beneficially
Name of Selling Stockholder Number Percent Being Offered Owned After Offering
- --------------------------- ----------- -------------------------- --------------------
<S> <C> <C> <C> <C>
Merlin BioMed, L.P...... 40,000 * 40,000 --
Moore Global
Investments, Ltd....... 160,000 * 160,000 --
MRM Life................ 10,000 * 10,000 --
Narragansett I, L.P..... 36,500 * 36,500 --
Narragansett Offshore,
Ltd.................... 13,500 * 13,500 --
Oakpoint Asset
Management............. 10,000 * 10,000 --
Park Place
International, Ltd..... 50,000 * 50,000 --
Prism Partners I
Offshore Fund.......... 7,500 * 7,500 --
Prism Partners I, L.P... 52,500 * 52,500 --
Prism Partners II
Offshore Fund.......... 15,000 * 15,000 --
Putnam Health Sciences
Trust.................. 476,000 2.0 476,000 --
Putnam Variable Trust--
Putnam VT Health
Sciences Fund.......... 24,000 * 24,000 --
Putnam Investment
Funds--Putnam Capital
Opportunities Fund..... 31,800 * 31,800 --
Putnam Capital
Appreciation Fund...... 68,200 * 68,200 --
PW Eucalyptus Fund,
LLC.................... 70,500 * 70,500 --
PW Eucalyptus Fund,
Ltd.................... 4,500 * 4,500 --
Remington Investment
Strategies, L.P........ 40,000 * 40,000 --
Salerno, Deborah........ 10,000 * 10,000 --
The Aries Master Fund... 32,190 * 32,190 --
The Great-West Life
Assurance Company...... 136,900 * 52,300 84,600
The Great-West Life
Assurance Company...... 20,000 * 7,700 12,300
United Capital
Management, Inc........ 60,000 * 60,000 --
Winchester Global Trust
Company Limited, as
Trustee for Caduceus
Capital Trust.......... 22,000 * 22,000 --
</TABLE>
- --------
* means less than 1%
19
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders may sell the shares from time to time. The selling
stockholders will act independently of us in making decisions regarding the
timing, manner and size of each sale. The sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and at
terms then prevailing or at prices related to the then current market price,
or in negotiated transactions. The selling stockholders may effect these
transactions by selling the shares to or through broker-dealers. The shares
may be sold by one or more of the following:
. a block trade in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction,
. purchases by a broker-dealer as principal and resale by a broker-dealer
for its account under this prospectus,
. an exchange distribution in accordance with the rules of an exchange,
. ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
. in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. If the plan of
distribution involves an arrangement with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, the amendment or
supplement will disclose:
. the name of each selling stockholder and of the participating broker-
dealer(s),
. the number of shares involved,
. the price at which the shares were sold,
. the commissions paid or discounts or concessions allowed to the broker-
dealer(s), where applicable,
. that a broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus, and
. other facts material to the transaction.
In addition, upon being notified by a selling stockholder that a donee or
pledgee intends to sell more than 500 shares, we will file a supplement to
this prospectus. In effecting sales, broker-dealers engaged by the selling
stockholders may arrange for other broker-dealers to participate in the
resales.
The selling stockholders may enter into hedging transactions with broker-
dealers in connection with distributions of the shares or otherwise. In these
transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders also may sell shares short and redeliver the shares to
close out short positions. The selling stockholders may enter into option or
other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer the shares under this prospectus. The selling stockholders also may
loan or pledge the shares to a broker-dealer. The broker-dealer may sell the
loaned shares, or upon a default the broker-dealer may sell the pledged shares
under this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling stockholders. Broker-
dealers or agents may also receive compensation from the purchasers of the
shares for whom they act as agents or to whom they sell as principals, or
both. Compensation as to a particular broker-dealer might be in excess of
customary commissions and will be in amounts to be negotiated in connection
with the sale. Broker-dealers or agents and any other participating broker-
dealers or the selling stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act of
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1933, when they sell the shares. Accordingly, any commission, discount or
concession received by them and any profit on the resale of the shares
purchased by them may be deemed to be underwriting discounts or commissions
under the Securities Act. Because selling stockholders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, the
selling stockholders will be subject to the prospectus delivery requirements
of the Securities Act. In addition, any securities covered by this prospectus
which qualify for sale under Rule 144 promulgated under the Securities Act may
be sold under Rule 144 rather than under this prospectus. The selling
stockholders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers
regarding the sale of their securities. There is no underwriter or
coordinating broker acting in connection with the proposed sale of shares by
the selling stockholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
some states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.
Each selling stockholder will be subject to applicable provisions of the
Exchange Act and the associated rules and regulations under the Exchange Act,
including Regulation M; these provisions may limit the timing of purchases and
sales of shares of our common stock by the selling stockholders. We will make
copies of this prospectus available to the selling stockholders and have
informed them of the need to deliver copies of this prospectus to purchasers
at or prior to the time of any sale of the shares.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the shares against specific
liabilities, including liabilities arising under the Securities Act. The
selling stockholders have agreed to indemnify specific persons, including
broker-dealers and agents, against specific liabilities in connection with the
offering of the shares, including liabilities arising under the Securities
Act.
LEGAL MATTERS
James U. Jensen, our Vice President, Corporate Development & Legal Affairs,
will pass on the validity of our common stock being registered.
EXPERTS
Our financial statements as of December 31, 1999 and 1998, and for each of
the years in the three-year period ended December 31, 1999 and for the period
from October 22, 1986 (inception) to December 31, 1999 have been incorporated
by reference in this prospectus and the related registration statement in
reliance upon the report of KPMG LLP, independent auditors, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You can inspect and copy the registration statement
on Form S-3 of which this prospectus is a part (File No. 333-96253), as well
as reports, proxy statements and other information filed by us, at the public
reference facilities maintained by the SEC at Room 1024, 450 Fifth Street,
N.W., Washington, D.C., 20549, and at the following regional offices of the
SEC: 7 World Trade Center, Suite 1300, New York, New York, 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois, 60661. You can
obtain copies of this material from the
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Public Reference Room of the SEC at 450 Fifth Street N.W., Washington, D.C.,
20549, at prescribed rates. You can call the SEC at 1-800-732-0330 for
information regarding the operation of its Public Reference Room. The SEC also
maintains a world wide web site at http://www.sec.gov that contains reports,
proxy and information statements, and other information regarding registrants
like our company that file electronically.
The SEC allows us to "incorporate by reference" other information that we
file with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and replace this information. We incorporate by
reference the documents listed below and any future filings made by us with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until we have sold all of the securities that we have registered:
1. Our Annual Report on Form 10-K for the fiscal year ended December 31,
1999.
2. Our Proxy Statement for the December 15, 1999 Special Stockholders
Meeting.
3. Our Proxy Statement in connection with our 1999 Annual Meeting of
Stockholders.
4. The description of our common stock contained in our Registration
Statement on Form 8-A filed May 23, 1994.
The reports and other documents that we file after the date of this
prospectus will update and supersede the information in this prospectus.
If you make a request for this information in writing or by telephone, we
will provide you without charge, a copy of any or all of the information
incorporated by reference in the registration statement of which this
prospectus is a part. Requests for this information should be submitted in
writing to: Corporate Secretary, NPS Pharmaceuticals, Inc., 420 Chipeta Way,
Salt Lake City, Utah, 84108, (801) 583-4939.
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You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling stockholders are offering to sell,
and seeking offers to buy shares of NPS Pharmaceuticals, Inc. common stock
only in jurisdictions where offers and sales are permitted. The information
contained in this prospectus is accurate only as of the date of this prospec-
tus, regardless of the time of delivery of this prospectus or of any sale of
NPS common stock.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Risk Factors............................................................... 3
Forward-Looking Statements................................................. 9
Use of Proceeds............................................................ 9
Business................................................................... 10
Selling Stockholders....................................................... 18
Plan of Distribution....................................................... 20
Legal Matters.............................................................. 21
Experts.................................................................... 21
Where You Can Find More Information........................................ 21
</TABLE>
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3,900,000 Shares
NPS Pharmaceuticals, Inc.
COMMON STOCK
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PROSPECTUS
April 20, 2000
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