Why NPS Pharmaceuticals' Shares Spiked

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: Gastrointestinal and endocrine therapies biotechnology company NPS Pharmaceuticals (NAS: NPSP) continues to bask in good news, with its shares higher by as much as 23% earlier in the trading session, following the release by the FDA of briefing documents from the Gastrointestinal Drug Advisory Committee regarding its new drug hopeful, Gattex.

So what: The immediate headline was enough to cause shareholders' stomachs to drop to their feet, as the briefing document noted three safety issues with NPS' short bowel syndrome drug, Gattex. The key takeaway, though, was that even with the existence of these issues, the committee wouldn't recommend that any safety restrictions be placed on the drug.

Now what: This is merely confirmation of what we already knew and what Foolish biotech guru Brian Orelli pointed out this morning: that NPS' Gattex works and is incredibly safe. During late-stage trials, only four patients dropped out, and of that, three were using the placebo. Gattex is on the docket for judgment day from the FDA next week (Oct. 16 to be exact), and all signs are pointing toward approval based on its efficacy, and now safety data.

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The article Why NPS Pharmaceuticals' Shares Spiked originally appeared on Fool.com.

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