NPS Pharmaceuticals Inc. and Enzon Pharmaceuticals Inc. have called off their merger after NPS wanted a change in the original stock conversion ratio.

Salt Lake-based NPS made the announcement Wednesday, saying New Jersey-based Enzon balked at renegotiating the ratio. The NPS announcement did not provide specifics.

When the companies made their merger announcement in February — calling for a $1.6 billion merger of equals — they said Enzon shareholders would receive 0.73 shares of the new company's common stock for each Enzon share owned. NPS shareholders would receive one share for each NPS share owned, they said.

The termination of the agreement will cost NPS, which will provide 1.5 million shares of NPS common stock that will be registered for resale by Enzon.

"NPS will continue the pursuit of its long-term strategic plans," Hunter Jackson, NPS president and chief executive officer, said in a prepared statement. "This includes the exploitation of our strong pipeline and, as always, the pursuit of partnering and strategic transactions. We look forward to continuing our work to build a growing, independent company."

Enzon's chairman and CEO, Arthur J. Higgins, said his company retains strong fundamentals and is well-equipped to remain a stand-alone business. "We wish NPS the best as we independently focus on advancing our separate businesses," he said.

NPS has been developing several potential products, including those designed to treat bone and mineral, gastrointestinal and central nervous system disorders. Phase III clinical trials for Preos, for the treatment of osteoporosis, are expected to be finished this fall.

Enzon has been involved in discovering, developing and commercializing drugs, both independently and with partners. Among the products on the market is Peg-Intron, used to treat chronic hepatitis C.

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Prior to February's announcement, the companies had been discussing a merger for more than a year. Had they merged, the combined company would have had a new name and had its headquarters in Bridgewater, N.J. The merger agreement called for NPS's work force of 190 and its Salt Lake City and Toronto research and manufacturing facilities to remain in place.

Officials at the companies suggested at the time that the merged company would be profitable in 2006.

The day the merger was announced, NPS stock fell more than 23 percent, or $5.70, to $18.64 per share. Enzon's dropped 46 cents at $13.57. The announcement about the merger being called off was made Wednesday after the stock markets closed. NPS stock closed Wednesday at $23.75, up $2.48 for the day. The price has ranged from $11.59 to $30.93 during the past year. Enzon stock rose 40 cents Wednesday to close at $15. It has ranged from $11 to $28.68 in the past year.


E-mail: bwallace@desnews.com

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