The ongoing market correction has taken a serious toll on biotech stocks, especially among companies early in their development. The iShares Nasdaq Biotech Index (IBB 0.46%), for instance, is down over 15% in the past month alone. Market corrections (and bull runs for that matter) are nonetheless notorious for overshooting, potentially creating value in their wake. My view is that this is the case with the little known orphan drug specialist NPS Pharmaceuticals (NASDAQ: NPSP). Prior to the marketwide correction, NPS was up over 140% year-over-year, but has now sunk over 30% in the first quarter of 2014. Here are four reasons why you should get this under-loved biotech stock on your watchlist.

Reason No. 1
NPS's amazing bull run in 2013 was fueled mostly by the successful commercialization of the company's first drug, Gattex. Gattex is an injection for adult Short Bowel Syndrome in the U.S. and is marketed in Europe as Revestive. Although the company reported only $31.5 million in global sales for 2013, what's important to understand is that NPS expects sales to grow by 250% in 2014. In other words, Gattex/Revestive global sales are projected to grow to $110 to $120 million this year.  That's a fairly decent revenue stream for a first commercial launch by most standards, and gives the fledgling company a revenue base from which to grow into a cash flow positive entity. 

Reason No. 2
The company's second clinical candidate, Natpara, will be reviewed by the U.S. Food and Drug Administration later this year. The current target PDUFA action date is October 24. Natpara is a hormone replacement therapy indicated as a potential treatment for a rare disorder called hypoparathyroidism. Hypoparathyroidism affects a person's ability to metabolize calcium, causing Vitamin D deficiency and weak bones. People with the disorder have to take a large number of calcium supplements every day, and even then, the disease is largely uncontrolled.

NPS Pharmaceuticals' CEO believes that Natpara could see peak sales of around $250 million a year. Moreover, NPS would face essentially no competition due a lack of alternative treatments, and patients with rare disorders such as hypoparathyroidism may seek out new therapies on their own, potentially reducing the cost of a potential marketing campaign. What's most important to bear in mind investment-wise is that Gattex and Natpara sales (if approved) could potentially increase NPS' top-line growth in 2015 several fold. So there are plenty of good reasons to keep track on Natpara's regulatory review later this year.

Reason No. 3
NPS sports a rich clinical pipeline led by NPSP795, a potential treatment for an ultra-rare disease called Autosomal Dominant Hypocalcemia, or ADH. Per the company's latest annual report, NPS plans on advancing this drug into a mid-stage "proof-of-concept" study for ADH by mid-2014. While this is drug is years away from potential regulatory approval, it shows that NPS's management is focused on creating deep value for shareholders.

Reason No. 4
NPS has a healthy and stable revenue stream through its licensing agreements with Amgen (AMGN 0.75%), Kyowa Hakko Kirin, GlaxoSmithKline (GSK 0.89%), and Janssen Biotech. All told, these agreements brought in $123.8 million in revenue for NPS in 2013. Looking ahead, you need to understand that NPS' amended agreement with Amgen entitles the company to royalty payments until the end of 2018, ensuring, at least partly, that a large portion of the company's licensing revenue will continue for the forseeable future.

GlaxoSmithKline is collaborating with NPS on the development of ronacaleret as a potential treatment for osteoporosis in post-menopausal women. Per the terms of the agreement, GlaxoSmithKline is responsible for the drug's development and commercialization, with NPS entitled to milestone and royalty payments on future sales of ronacaleret. That said, what NPS wanted most in the amended agreement with GlaxoSmithKline was the rights to NPSP795, which had previously been shared between the two companies. 

Foolish wrap-up
NPS could see some incredible top-line growth if Natpara is approved come October and Gattex/Revestive meet their annual sales projections. Not many biotechs can offer that level of growth, even during the transitional phase from developmental to commercial biotech. My view is that this growth is possible largely because NPS is pursuing drugs for rare diseases that command premium prices and offer a number of other competitive advantages over traditional medicines. Indeed, this is why orphan drugmakers have been some of the best performing biotechs for awhile, and NPS is looking to continue this trend. As such, you may want to dig deeper into this specialist biotech.