Salt Lake-based NPS Pharmaceuticals Inc. has postponed filing a quarterly document with the Securities and Exchange Commission because of an investigation into a former employee's alleged activities in helping a Georgia-based company improperly secure a contract with NPS.
In a document sent to the SEC this week, NPS said it would file the form by Monday.
NPS said the audit committee of its board of directors has hired outside legal help to investigate the circumstances involving the contract between NPS and PharmData Inc., which has been compiling and analyzing data for NPS.
NPS "believes that PharmData procured the contract through improper payments to a company employee, who has been subsequently terminated," NPS said in the filing.
The report for the quarter ended March 31 could not be filed on time because the investigation "could not be completed without unreasonable effort or expense" by then. Also, independent auditors KPMG LLP told NPS it would have been unable to complete its required review of the interim financial information included in the filing.
In announcing financial results for the first quarter last week, NPS said PharmData had filed a lawsuit against NPS in late April in Georgia, alleging breach of contract because NPS failed to make specified monthly payments to PharmData. NPS said at the time it would contest the suit and evaluate its legal options while preparing a countersuit. It said then that it believed the contract was the result of illegal payments to a former NPS employee.
NPS said it has repudiated the contract and would try to gain release from its obligations to PharmData, which has compiled and analyzed data from toxicity studies of NPS' osteoporosis drug candidate Preos.
NPS stressed that the dispute does not involve handling of data from a Preos Phase 3 study, but the dispute could delay the filing of a new drug application for Preos with the U.S. Food and Drug Administration, "depending on how rapidly data entry with a new contract research organization could begin and be completed."
The company added that it did not expect the lawsuit to have a material effect on its pursuit of Preos regulatory approval or the company's financial position.
E-mail: bwallace@desnews.com