NPS stock rises 21% on report

NEW YORK — Salt Lake-based NPS Pharmaceuticals Inc. stock rose Tuesday after Lehman Brothers upgraded the company, citing a positive outlook for its osteoporosis drug Preos.

Shares of NPS rose $2.13, or 21 percent, to close at $12.17 Tuesday on the Nasdaq Stock Market. In the past year, the price has ranged from $9.18 to $23.45.

Lehman raised the pharmaceutical company to "overweight"' from "equal weight," noting improved commercial potential for Preos.

Osteoporosis is a disease characterized by thinning bones. It is most common in women over 50 years old.

The Washington-based National Osteoporosis Foundation estimates that 10 million American women currently suffer from osteoporosis.

NPS is seeking Food and Drug Administration approval to label Preos for broad use in osteoporosis treatment.

Preos would be given to patients who have not yet broken their bones, unlike Preos' main competitor, Eli Lilly & Co.'s Forteo, or teriparatide.

Lehman said that while in the past it has questioned the commercial potential of Preos, with the stock down 70 percent over the last 18 months and an equity value of $390 million, well below any other company with a drug in late-stage trials, "we believe that commercial risk is more than adequately represented and view the question of regulatory approval as central currently."

"Ultimately, differentiation of Preos from Forteo would be established by approval itself given the broader label sought by NPS," Lehman said.

Lehman estimates Preos could garner 2007 and 2008 sales of $550 million and $750 million, respectively, which would comprise 11 percent to 15 percent of the vertebral fracture market.