Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why NPS Pharmaceuticals Shares Soared

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotechnology company NPS Pharmaceuticals (UNKNOWN: NPSP.DL  ) jumped as much as 21% after announcing that it and Takeda Pharmaceuticals (NASDAQOTH: TKPYY  ) had revised their collaborative agreements.

So what: And by "collaborative agreements" I mean that NPS agreed to pay Takeda $50 million in NPS' common stock in order to regain full global rights to its short bowel syndrome drug, Gattex, known as Revestive in Europe, and recombinant human parathyroid hormone 1-84. Takeda will also be eligible to receive a milestone payment from NPS when combined net sales of these two compounds exceed $750 million in a calendar year.

Now what: It's a slight bit worrisome that NPS is approaching sales of Revestive in Europe without a strong marketing partner in Takeda, but I believe it should be able to sell the short bowel syndrome drug without too much trouble given that SBS sufferers have few options to begin with. Overall, it looks like NPS got off incredibly cheap. Peak sales estimates of $350 million have been thrown around in the U.S. for Gattex, and I have to assume something similar is possible in Europe. Ultimately, the company is valued just a hair over the potential peak sales of its SBS drug, which it now owns outright. NPS could still have quite a bit of running room ahead of it.

Craving more input? Start by adding NPS Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.

While you can certainly make huge gains in biotechs like NPS, you have to keep an eye on the overall market, too. What macro trend was Warren Buffett referring to when he said "this is the tapeworm that's eating at American competitiveness"? Find out in our free report: "What's Really Eating At America's Competitiveness." You'll also discover an idea to profit as companies work to eradicate this efficiency-sucking tapeworm. Just click here for free, immediate access.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2320912, ~/Articles/ArticleHandler.aspx, 10/1/2016 11:48:09 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 14 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
NPSP.DL $0.00 Down +0.00 +0.00%
NPS Pharmaceutical… CAPS Rating: ****
TKPYY $23.96 Up +0.13 +0.52%