Lupus Buster Unleashed! (HGSI, GSK)
Human Genome Sciences, Inc. (NASDAQ: HGSI) has spent 2009 as its year where the company acted as the rising Phoenix from the ashes. Things had reached bad enough levels that the stock traded under the $1.00 mark. But a surprising twist in its experimental lupus drug called Benlysta has created a major change of fate here because lupus is largely unmet with any real treatments and it has been years and years that any new drug has come on the market to fight this disease.
Options trading had gone through the roof last week ahead of this morning’s expected study results. The second study showed that Human Genome Sciences’ Benlysta met its primary endpoint in BLISS-76, the second of two pivotal Phase III trials in seropositive patients with systemic lupus erythematosus.
The company noted that BENLYSTA is the first drug for lupus to reach Phase III and achieve positive results, in the largest randomized placebo-controlled clinical trials ever completed in patients with the disease. The company further noted that this is an important milestone for the lupus community as there has not been a new treatment for lupus approved by regulatory authorities in more than 50 years.
The first positive results from the first BENLYSTA trial, called BLISS-52, were announced in July. GlaxoSmithKline is the partner for this drug and the companies are said to split the profits 50/50 when it is approved. The companies plan to file for marketing approval applications for BENLYSTA in the United States, Europe and other regions in the first half of 2010.
There is one notion to consider, although the reality is that it probably won’t matter. The success came in the higher dosage arm of the study rather than at the low dosage.
Today’s news takes Human Genome Sciences back to highs not seen since 2002 when the company had a much different focus as that was a post genome-mapping period. The last time this was at $25.00 was in March-2002. And this had been a $70 stock in 2001 and even above $100 on a split-adjusted basis in early 2000.
Shortly after the market open, we have shares trading up some 38% at $28.84 on over 9.7 million shares. You can count on today being an exponential volume day compared to its 7.9 million shares on average trading days.
As far as why this is soaring so much, that is simple. Any lupus drug has blockbuster written all over it for that $1 billion in annual sales hurdles. One estimate we saw last week even noted the possibility that this could be a $3 billion drug under the right circumstances. And if there have been no new treatments for as long as the company noted, then a more restrictive healthcare and drug spending climate probably won’t apply to hammering down on a company with this big of a treatment.
JON C. OGG
