Human Genome Sciences What’s up

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Human Genome Sciences (HGSI) is an emerging biotech company that announced promising results in one of its study drugs, BENLYSTA TM, designed for use in patients with lupus. Lupus is a painful disease in which the body attacks its own tissues. The drug is set for further study trials that are expected to confirm the results of the July findings by November. The drug will then move on for FDA approval and would be the first new pharmaceutical for lupus in 50 years.

Prior to the announcement, Wall Street skeptics bet against success of the trials, downgrading the stock to a target price of $1. Following the announcement on Tuesday, July 20, 2009, the stock rose quickly to a price of $10.22 per share, well above the closing price on the preceding Friday of $3.22 per share.

The company has other promising drugs in the late stages of development, including ABthraxTM, a drug for inhalation anthrax being developed under contract with the United States government. The company reported $153.8 million in revenues during the first quarter 2009 from delivery of 20,000 doses to the US Strategic National Stockpile. Another drug on the horizon is Albuferon, a treatment for hepatitis C.

Human Genome Sciences' first-quarter results for 2009 shows a strong cash position with $329.3 million in cash and investments available for operations. Tim Barabe, senior vice president and CFO of HGS is quoted as saying, "Our revenues were up substantially and were driven for the first time by product sales. We reduced our long-term debt by more than 20 percent by capitalizing on an opportunity to repurchase $106 million of our outstanding convertible notes at reasonable prices."

HGS believes its cash position will carry them through the marketing approval stage of the drug. In the marketing approval stage, the results of the trials will be presented to the FDA who may or may not grant marketing approval or could request more information. Approval may not end the testing of the drug, as the FDA can require the drug to enter Phase 4 trials or other ongoing studies to determine the ultimate safety of the drug.

With the success of the clinical trials so far, BENLYSTATM is expected to yield revenues of $600 million worldwide. Since there are no other treatments on the market specifically for lupus, the company will not face competition from other drugs. Approximately 1.5 million Americans suffer from this debilitating disease, as well as an estimated 5 million worldwide. Symptoms include joint pain and swelling, rashes, hair loss, unexplained fevers, and muscle pains. The cost for the patient is expected to be about $15,000 to $20,000 per year per patient.


2008 Annual Report, Human Genome Sciences,

Olmos ,David and Rapaport, Lisa. Human Genome Science Triples on Success of Lupus Drug (Update3). July 20, 2009.

Human Genome Sciences lupus drug met study goal. July 20, 2009. Thomas Financial News

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