Human Genome Sciences
Today, let's look at three things investors should be watching regarding Human Genome Sciences, as they will provide us better insight into the company.
1. Takeover chatter
The first thing shareholders of HGS need to keep their eyes peeled for is updated information regarding GlaxoSmithKline's
Don't get me wrong, a deal would completely make sense because Glaxo and HGS co-developed lupus drug Benlysta. In addition, as the Fool's health-care guru Brian Orelli pointed out in April, two of HGS' phase 3 drugs are under license to Glaxo, which would mean the best an outside suitor could hope for is royalty or milestone payments. Whether HGS realizes it or not, this is really Glaxo's bid to lose; now it's just a matter of will the bid move higher? It took Sanofi
2. Benlysta marketing and pricing
If there was any lesson biotech investors took away from the sector last year, it was that getting a drug approved is only half the battle. Sales of Benlysta, the first lupus drug approved in 50 years, should have taken off, but instead limped out of the gate. HGS has claimed this has more to do with the ebb-and-flow nature of the disease, but I'd say it has more to do with a poor marketing effort and the fact that the drug will cost patients about $35,000 annually.
We saw a similar failure to launch from Dendreon's
It's quite possible that despite having revolutionary and unique drugs, both HGS and Dendreon may need to consider lowering their price in order to boost sales. HGS may also need to seriously consider bringing in a more experienced sales team to drive Benlysta sales since revenue only increased 21% sequentially over the fourth quarter.
3. The non-Benlysta pipeline
This should go without saying, but there's more to HGS than just Benlysta.
Raxibacumab, used to treat inhalation anthrax, received two orders from the U.S. government totaling 65,000 vaccines in 2009. Although it hasn't received formal FDA approval, HGS continues to work with the FDA on making that a reality. What should be noted is that HGS doesn't have the only inhalation anthrax hopeful as Emergent BioSolutions
Perhaps even more important than raxibacumab are HGS' phase 3 clinical trials for abliglutide and darapladib that are being co-developed with Glaxo. Albiglutide is a type-2 diabetes drug that, if approved, would be entering a very crowded market. I find darapladib the more interesting of the two as it inhibits the biological activity of an enzyme that could reduce the adverse risk of a heart attack or stroke in patients with coronary heart disease or acute coronary syndrome. As a potential atherosclerosis drug, the market is huge, however, it should also be noted that darapladib failed to impress in mid-stage studies so an approval could be a long shot.
Now that you know what to watch for, it should be easier to analyze Human Genome Sciences' successes and pitfalls in the future and hopefully give you a competitive investing edge.
If you're still craving even more info on Human Genome Sciences, I would recommend adding the stock to your free and personalized watchlist so you can keep up on all of the latest news with the company.
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