We are maintaining our Neutral recommendation on Human Genome Sciences Inc. (HGSI) with a target price of $29.00.
Human Genome Sciences, Inc., founded in 1992 and based in Rockville, Maryland, is a biopharmaceutical company. The US approval of Benlysta in March 2011 for treating patients suffering from systemic lupus erythematosus is a huge positive for Human Genome. The drug, which has blockbuster potential, has been co-developed with GlaxoSmithKline (GSK). Benlysta is expected to hit the US markets before the end of March 2011.
The approval of Benlysta by the US Food and Drug Administration (FDA) makes it the first new lupus drug to be cleared in more than 50 years. Lupus is a potentially fatal autoimmune disease that is extremely difficult to treat. We believe that the approval of this potentially blockbuster candidate will drive Human Genome to profitability.
Benlysta is under review in many other countries. Human Genome expects Benlysta to be approved in Europe in the second half of 2011. The drug is also under review in Canada, Australia, Switzerland, Russia, Brazil and Philippines. We believe that the approval of Benlysta in additional territories would spur further top-line growth at Human Genome.
Even though, Benlysta was cleared by the FDA, Human Genome’s hepatitis C candidate, Zalbin (albinterferon alfa-2b) met a different fate.In October 2010, the FDA refused to approve the candidate at the current dosage and issued a complete response letter (CRL). Following the receipt of the CRL, Human Genome and partner Novartis (NVS) decided against continuing with the development of the candidate.
Moreover, in May 2009, the company submitted a Biologics License Application (BLA) to the FDA for ABthrax for treating inhalation anthrax. The agency issued a CRL to the company in November 2009. Currently, the company is working with the FDA to obtain approval for the candidate.
Even though, the US approval of the lupus drug has given a huge boost to Human Genome, we prefer to remain on the sidelines till visibility is obtained regarding Benlysta’s performance in the market. Consequently, we retain our ‘Neutral’ stance on the stock.
GLAXOSMITHKLINE (GSK): Free Stock Analysis Report
HUMAN GENOME (HGSI): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
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