Human Genome Sciences shares fall as 1Q results disappoint

Shares of biotechnology company Human Genome Sciences Inc. fell Tuesday after the company's first-quarter results disappointed investors.

Shares fell 50 cents, or 7.5 percent, to $6.13. The stock has traded between $4.74 and $11.95 over the last 52 weeks.

Late Monday, the company said its first-quarter loss narrowed on higher payments from its drug development partners. But the loss of 35 cents per share was worse than the loss of 19 cents per share predicted by Wall Street, according to a Thomson Financial poll.

Wall Street took a cautious view on the company's advanced and high-risk development programs. Human Genome is partnered with Novartis for the developing hepatitis C drug Albuferon and with GlaxoSmithKline for the lupus drug LymphoStat-B.

"Management has been strategic in the nature and design of (the company's) clinical programs and core focus areas," said Goldman Sachs analyst Meg Malloy in a note to investors. "However, given the high risk nature of lupus and the first-quarter safety signal with high dose Albuferon in hepatitis C, we believe that investors are likely to await further data before potentially becoming more aggressive on the stock."

She reaffirmed a "Neutral" rating with an $11 price target.

In January, the company lowered the dose of Albuferon given to late-stage study participants because of a serious lung-related safety issue.

Lehman Brothers analyst Dr. Jim Birchenough also viewed the company's programs as high risk and maintained a "Equal Weight" rating.

Analysts expect additional study data on Albuferon and LymphoStat-B in late 2008 and 2009.

Robert W. Baird analyst Christopher Raymond took a less cautious position, reaffirming a "Buy" rating with a $10 price target, as he expects positive study results in 2008 to drive the stock price higher.