HGSI’s Cancer Candidate Disappoints – Analyst Blog

www.zacks.com/stock/quote/HGSI
Recently, Human Genome Sciences, Inc. (HGSI) announced disappointing results from a mid-stage study which evaluated its candidate mapatumumab (HGS-ETR1) in conjunction with Takeda’s bortezomib (Velcade) for treating patients suffering from advanced multiple myeloma.
 
The data from the randomized study did not demonstrate any difference in disease response or progression-free survival rates between patients receiving mapatumumab plus bortezomib compared with those receiving bortezomib alone. The company intends to present complete results from this study in a scientific meeting later this year.
  
Human Genome has already faced another development setback with mapatumumab earlier this year. In March 2010, Human Genome announced that mapatumumab failed a mid-stage study in lung cancer patients.
 
 The company is also evaluating mapatumumab in another randomized mid-stage study in combination with Nexavar (sorafenib) of Onyx Pharmaceuticals, Inc. (ONXX) for treating patients suffering from advanced hepatocellular cancer. The study was initiated in 2008.
 
Mapatumumab, a human monoclonal antibody, attaches and activates a protein known as TRAIL receptor 1, to trigger a cancer cell’s death. Mapatumumab was initially co-developed by Human Genome and GlaxoSmithKline (GSK). However, in 2008 Human Genome reacquired rights to the TRAIL receptor antibodies HGS-ETR1 (mapatumumab) and HGS-ETR2 (lexatumumab) from Glaxo in return for a reduction in royalties due to Human Genome if Syncria (albiglutide) is commercialized. Syncria is also being co-developed by the two companies for patients suffering from type II diabetes.
 
Furthermore, Human Genome possesses an interesting late-stage pipeline. We believe investor focus will be mainly on lupus candidate Benlysta, which is being co-developed with Glaxo. Benlysta, if approved, would be the first new lupus drug to be approved in 50 years. Lupus affects about 1.5 million people in the United States and 5 million people worldwide. If approved, we expect Benlysta to become a blockbuster drug.
 
Apart from Benlysta, Human Genome has two other interesting late-stage candidates in its pipeline, namely Zalbin for hepatitis C and ABthrax for treating anthrax. Zalbin, which is co-developed with Novartis (NVS), is under review in the US (target date: October 4, 2010). However, the Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for Zalbin was recently withdrawn by Novartis.

 Additionally, the FDA did not approve ABthrax for anthrax treatment late last year. The agency has asked for additional data pertaining to the drug before it grants approval. However, Human Genome, which has the contract of delivering doses of ABthrax to the US Strategic National Stockpile for use in the event of an emergency to treat inhalation anthrax, has already delivered multiple doses.
  
Our Recommendation
  
Currently we have a Neutral outlook on Human Genome in the long term, implying that it will perform in line with the overall U.S. equity market over the next six to twelve months. We advise investors to retain the stock over the time period.