NPS shares fall as Glaxo pulls out of drug study

The stock fell $1.05, or 12.6 percent, to $7.28. Shares of the Bedminster, N.J.-based company have traded between $3.45 and $8.96 over the last 52 weeks.

U.K.-based GlaxoSmithKline and the NPS have been partners since 1993 and collaborated on Ronacaleret, aimed at post-menopausal osteoporosis. The condition reduces bone density and strength, increasing the risk for bone fractures. NPS has received about $26.1 million so far for development of the drug, which made it to midstage development.

While investors pushed NPS shares lower Friday, Jefferies & Co. analyst Dr. Adam Walsh brushed off the financial significance of the terminated program, saying it wasn't vital to the company.

"We never included Ronacaleret revenue estimates in our model and as a result, termination of Ronacaleret development has no impact on our model," Walsh said, reaffirming a "Hold" rating with a $8 price target.

Meanwhile, NPS expects to meet with GlaxoSmithKline to discuss other compounds' potential to move in clinical trials.

Walsh highlighted positive data from NPS on other developing drugs, including a short-bowel syndrome treatment. Some of that data will be presented at the American College of Gastroenterology's meeting in Orlando in October.

"We believe these presentations could serve as catalysts to refocus (Wall) Street interest on this pipeline compound," Walsh said.