Why NPS Pharmaceuticals Skyrocketed

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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 Inc.  surged 22% today after its quarterly results and outlook impressed Wall Street.

So what: The stock has soared over the past year on strong sales of its bowel syndrome drug Gattex, and today's Q2 results -- Gattex sales of $4.8 million versus the consensus of $2.5 million -- coupled with upbeat guidance suggests that the momentum isn't slowing. In fact, all key national health plans and major pharmacy benefit managers in the U.S. have already approved Gattex prescriptions, giving analysts plenty of good vibes over the drug's potential abroad.

Looking ahead, management now expects 2013 global Gattex/Revestive sales of $25 million-$30 million with 275-325 patients on therapy by the end of the year.

"Our international strategy is now being implemented with the establishment of our international headquarters in Dublin, the initiation of the EU pricing and reimbursement process, and the implementation of named-patient programs in certain countries," said CEO Francois Nader.

Of course, with the stock now up a staggering 225% from its 52-week lows and trading at a price-to-sales multiple of 17, Fools will need plenty of biotech savvy to know just how much of that potential is already baked into price.

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The article Why NPS Pharmaceuticals Skyrocketed originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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