On its own again after a recent merger agreement fell apart, NPS Pharmaceuticals Inc. said it plans to issue $125 million in convertible notes.

The dust continues to settle after the company agreed to terminate its merger agreement with Enzon Pharmaceuticals Inc. Last week, the parties called off the $1.6 billion merger after hitting a stalemate while negotiating the deal's stock conversion rate. NPS wanted to renegotiate the exchange ratio. (See BioWorld Today, June 6, 2003.)

David Clark, vice president of operations at NPS, told BioWorld Today that a quiet period regarding the offering precluded him from commenting on the news.

But the Salt Lake City company said it would issue the notes, due in 2008, through a Rule 144A offering to qualified institutional buyers. They would be convertible into common stock at an undetermined price. NPS also will grant the buyers an option to purchase an additional $25 million worth of notes.

NPS did not indicate when it expected the offering to close.

But the end of its merger agreement with Enzon came a little more than three months after the deal was first struck. Based on the original terms, the union would have given NPS and its shareholders control of about 53 percent of the 66 million shares outstanding at the combined company.

Each NPS shareholder would have received a full share of the new entity's common stock for each NPS share owned, and each stockholder in Bridgewater, N.J.-based Enzon would have received 0.7264 shares for each Enzon share. Prior to the deal, NPS reported about 35.1 million shares outstanding and Enzon had about 43 million.

The deal's initial $1.6 billion value was based on the 66 million shares and NPS's closing price when the merger was announced. Its shares (NASDAQ:NPSP) closed at $18.27 that day. (See BioWorld Today, Feb. 21, 2003.)

Its stock gained 27 cents Wednesday to close at $27.10.

As of March 31, NPS reported about $209 million in cash, cash equivalents and marketable securities. The company recorded a first-quarter net loss of $28.1 million for the period ended that date.

In the near term, NPS is looking toward a few drug development milestones.

The company said its licensee, Amgen Inc., would file a new drug application in the second half of this year for cinacalcet. Its Thousand Oaks, Calif.-based partner has developed the drug to treat secondary hyperparathyroidism.

In late April, Amgen said data from a Phase III study of dialysis patients suffering from the effects of chronically elevated levels of parathyroid hormone indicated that cinacalcet appeared to be safe and well tolerated. Findings also pointed toward a statistically significant measure of the drug's efficacy, as judged by metabolic endpoints.

NPS also continues to look toward a positive outlook for Preos, its osteoporosis treatment that remains in Phase III studies. Clinical investigators provided the company with preliminary data from the first year of one study, showing that safety and efficacy results in 238 post-menopausal women with low bone mineral density and additional fracture risk factors were in line with prior clinical findings.

NPS added that more than 75 percent of patients who completed 18 months of dosing in another Phase III trial opted to enroll in an open-label extension study, which allows for a total use of Preos for up to 24 months.

The company features four other products in Phase I or II programs.