NPS Pharmaceuticals, Inc. announced the sale of its royalty entitlement from European sales of Preotact (full-length parathyroid hormone [PTH 1-84]) to Drug Royalty L.P. 3 (DRC) for $50 million up front and a milestone payment of $25 million payable in early 2010 if target sales levels are met. NPS plans to use some or all of the proceeds to purchase or, upon maturity, repay a portion of its outstanding convertible 3 per cent notes due in 2008.

"This transaction reflects the successful execution of our plan to monetize certain non-core assets and strengthen our financial position," said Tony Coles, M.D., president and CEO of NPS. "We intend to use the proceeds of this sale to reduce our outstanding debt obligation and strengthen our balance sheet in order to support future investment in our late-stage product candidates."

Speaking on behalf of DRC, Paul Kirkconnell, managing director said, "We are excited to add NPS and Nycomed's Preotact to our growing portfolio of assets and it is clear that Preotact can become an important drug for patients in Europe." Kirkconnell added that, "With access to significant capital and a long track record in completing royalty transactions, we look forward to continuing to help meet the needs of pharmaceutical and biotechnology companies such as NPS."

NPS developed Preotact (US trade name PREOS) and licensed European marketing rights to Nycomed in 2004. The drug was approved by the European Medicines Agency in 2006 for the treatment of osteoporosis in postmenopausal women at high risk of fractures and has been launched in most of the major European markets. Nycomed expects to complete the drug's launch throughout the European Union this year.

Drug Royalty Corporation (DRC) is a privately held investment management company, focused on the healthcare industry, with over $1 billion under management. DRC currently manages two funds: the Royalty Monetization Fund and the Structured Finance Fund.
NPS is a biopharmaceutical company focused on the development and commercialization of small molecules and recombinant proteins as drugs, primarily for the treatment of metabolic, bone and mineral, and central nervous system disorders.