NPS Pharmaceuticals (Nasdaq: NPSP) is Trading Higher on Expectations of Q1 2010 Results
29 Apr 2010

NPS Pharmaceuticals (NASDAQ: NPSP) earnings conference is scheduled to start on Wed, May 5 as announced on April 28, but some good news may have been filtered in the stock price as it is continuing to rise since beginning of April.  On April 29 the stock recorded increased trading volumes at  the $ 6.8 level but has lost some of its momentum at higher levels.

The yearly financial results as released on April 15 for the year ended 2009 have shown an improvement:

+ net loss of $17.9 million or $0.37 per diluted share for 2009 vs net loss of $31.7 million or $0.67 per diluted share for 2008;

+ lower SG&A and interest expenses in 2009 compared to 2008

+ higher R&D in 2009 compared to 2008

However, this was not due to the  items before the operating  line but  to other positive movements that cannot be attributed to the direct business scope of the company such as

- other income of $5 million  in 2009 compared to other expense of $15 million in 2008.

Overall the company has not been able to reverse the trend in its negative equity, reaching ($223) million in 2009 as compared to ($215) million in 2008.

Therefore, much of the price movement since the beginning of April cannot be supported by some very strong fundamentals and is mainly speculative based on promotions in anticipation of public offering and positive expectations.

On April 21 the company announced the closing of a public offering of 10,350,000 shares of its common stock, including 1,350,000 shares sold pursuant to the full exercise of an overallotment option previously granted to the underwriters. All of the shares were offered by the Company. Net proceeds were approximately $53.3 million after deducting underwriting discounts and commissions, and estimated offering expenses. Canaccord Adams acted as sole book-running manager and Needham & Company, LLC acted as co-manager for the offering. The strong underwriter support has also largely contributed to the latest upward price movements.

1 Comment
  1. Real brain power on display. Takhns for that answer!

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