In March, after the Food and Drug Administration approved lupus drug Benlysta, Human Genome Sciences (Nasdaq: HGSI) hit a multiyear high. From the low of below $0.50, the biotech soared some 6,300%.
Too bad it didn't last.
Even excluding the post-approval euphoria, Human Genome Sciences is down nearly 70% this year. It's worse if you measure from the peak.
Like Dendreon (Nasdaq: DNDN), which I reviewed here, Human Genome's main problem this year was a lackluster launch of Benlysta. It's no longer good enough to simply get a drug approved and sit back and watch sales roll in. Companies must convince doctors, patients, and payers that the drug is worth taking.
Human Genome and marketing partner GlaxoSmithKline (NYSE: GSK) are having trouble doing that. Or at least doing it quickly enough to keep investors interested. Sales in the second quarter totaled $7.8 million, followed by $18.8 million in the third quarter. While the quarter-over-quarter growth is impressive, it's a far cry from the blockbuster investors were expecting.
Part of the problem is that patients and doctors can take a wait-and-see attitude toward Benlysta. Lupus can be debilitating, and the patients most severely affected are probably those being put on the drug, but the disease waxes and wanes, so Human Genome and Glaxo may have to wait until enough patients cycle through the bad spells before they can get access to them.
The companies just started a trial testing the subcutaneous formulation of the drug that could be administered once a week. That's actually more frequent than the current formulation, which is administered at two-week intervals for the first three doses and at four-week intervals thereafter. But the current formulation requires a one-hour infusion, which is certainly less convenient than patients sticking themselves with a needle and being done with it.
Convenience is a big issue with patients; it's driving Amylin Pharmaceuticals (Nasdaq: AMLN) to develop a once-weekly version of Byetta and Pfizer (NYSE: PFE) and others to develop oral rheumatoid arthritis drugs for a market dominated by injectables. The final outcome for the subcutaneous trial won't be calculated until patients have been on the drug for a year, so this is no near-term fix for Benlysta.
For Human Genome to get back to this year's highs, it's going to have to hit the pavement, get in front of doctors, and hope that the success with initial patients drives additional prescriptions.
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