UPDATE 2-NPS bowel drug trial succeeds; shares jump 30 pct

Mon Jan 31, 2011 12:10pm EST

* 63 pct Gattex patients had at least 20 pct PN reduction

* US FDA filing expected second-half 2011

* NPS shares jump 30 percent (Adds analyst comment, updates share price)

By Deena Beasley

LOS ANGELES, Jan 31 (Reuters) - NPS Pharmaceuticals Inc (NPSP.O) said its experimental drug Gattex reduced the need for intravenous feeding in nearly two-thirds of patients with short bowel syndrome, sending its shares up 30 percent.

The Phase 3 trial showed that 63 percent of patients treated with the injected drug for 24 weeks had at least a 20 percent reduction in the need for intravenous nutrition, compared with 30 percent of patients given a placebo.

Short bowel syndrome (SBS) refers to problems related to poor absorption of nutrients that can occur in people who have had part of their small intestine removed due to Crohn's disease, cancer surgery or other conditions.

The trial results "should support Gattex FDA (Food and Drug Administration) approval and ensure adoption in the SBS treatment market," Canaccord Genuity analyst George Farmer said in a research note.

The main goal of the trial was the percentage of patients who achieved a 20 percent or greater reduction in weekly parenteral nutrition (PN).

NPS said the 86-patient trial, which tested a 0.05 mg/kg dose of Gattex, showed that patients given the drug had a 4.4 liter average reduction in weekly PN volume, compared with a reduction of 2.3 liters for placebo patients.

Patients with SBS typically receive 12 to 13 liters per week of intravenous feeding, according to NPS.

An earlier 12-month trial -- for which results were announced in 2007 -- failed to show that a higher dose of Gattex was effective.

Francois Nader, chief executive officer at NPS, said he expects a two-year follow-on study will show that, over the longer term, the lower dose of the drug further reduces the need for parenteral nutrition.

NPS plans to file for U.S. regulatory review of Gattex, also known as teduglutide, in the second half of this year.

The drug is an altered version of GLP-2, a naturally-occurring hormone.

Nader said Gattex works through three mechanisms to improve nutritional absorption: regeneration of the intestinal lining, slowing down transit through the gut and increasing blood flow.

Side effects in the trial included nausea and vomiting. One patient dropped out of the trial due to a Gattex-related adverse event, and three placebo-treated patients dropped out due to side effects. Another four patients left the trial for other reasons, the company said.

NPS has licensed rights to Gattex outside of North America to Switzerland's Nycomed [NYCMD.UL], but plans to retain U.S. rights, the CEO said.

Nycomed expects to file in the first half of this year for approval in Europe, according to NPS.

Nader estimated that there are between 10,000 and 15,000 adult SBS patients in the United States who are chronically dependent on intravenous nutrition.

The CEO also estimated peak U.S. sales at $350 million.

Shares of NPS were up $2.25 to $9.86 in noon trading Monday on the Nasdaq. (Editing by Carol Bishopric, Derek Caney and Tim Dobbyn)

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