Usually, confirmatory phase 3 trials don't cause 40% gains in a stock. Especially after the first one resulted in a crazy 500%-plus gain.
Then again, most drugs don't treat lupus.
There was still a lot of skepticism -- mine included -- going into today's data release for Human Genome Sciences'
Turns out the skeptics had nothing to worry about. In the second trial, Benlysta showed a statistically significant improvement in symptoms compared with the placebo. The results weren't quite as good as the first trial -- including missing three secondary goals at the highest dose -- but having two trials that passed their primary test should satisfy the regulators. It looks like Benlysta will be the first drug approved specifically to treat lupus in 50 years, succeeding where drugs from Biogen Idec
So is Human Genome worth buying now that the fear of failure has subsided? Unfortunately, the awesome biotech returns have passed. Much of the potential sales are already priced into the company, which now has a market cap of more than $3 billion.
Human Genome receives revenue for sporadic sales of its anthrax treatment and has a hepatitis C drug candidate, Zalbin, that's expected to hit regulators' desks this quarter. The lackluster trial results from Zalbin, which is partnered with Novartis
That leaves most of the company's value tied up in Benlysta. Human Genome and marketing partner GlaxoSmithKline
Even if Benlysta is the blockbuster everyone expects it to be, that's an awfully long time to wait with so much of the revenue already priced in.