Human Genome Sciences, Inc. (HGSI) and BioInvent International AB, a Swedish pharmaceutical research company, have joined forces to discover, develop and commercialize therapeutic monoclonal antibodies that specifically target antigens discovered by Human Genome. However, the financial terms of the transaction were undisclosed. 

Under the terms of the agreement, the Swedish firm will apply its antibody discovery technology for generating and developing monoclonal antibody candidates. The deal will initially focus towards developing antibodies in the field of inflammation. Both the parties have agreed to share costs related to research, development and commercialization and any potential revenue. 

The partnership with the Swedish firm will provide a perfect opportunity to Human Genome to advance its pipeline and develop potential new drugs based on discoveries made by Human Genome. The Swedish firm already possesses a broad and innovative portfolio of therapeutic antibodies, with four products in various stages of development in the fields of thrombosis, atherosclerosis and cancer. 

Human Genome also possesses a robust and diversified late-stage pipeline with two potential approvals by the end of 2010. The most eagerly awaited candidate is the lupus pipeline drug Benlysta, co-developed with GlaxoSmithKline Plc (GSK), which has blockbuster potential. The company intends to seek approval for Benlysta during the second quarter of 2010 in the United States and Europe. Management expects the drug to be approved in the U.S. in the fourth quarter of 2010.
Zalbin (formerly Albuferon) is another interesting late-stage candidate. It is being developed to treat Hepatitis C under a worldwide agreement with Novartis (NVS). Late-stage study results have confirmed its efficacy. The candidate is under review both in the U.S. and Europe. Management expects the U.S. Food and Drug Administration (FDA) to approve the drug in the fourth quarter of 2010 (target date: October 4, 2010). We believe that Zalbin could be a significant revenue earner on approval. 

Another high potential candidate is ABthrax (raxibacumab) for anthrax disease. Human Genome is under contract to deliver doses of ABthrax to the U.S. Strategic National Stockpile, which stores huge quantities of medicine and medical supplies to be used in national emergencies like a flu outbreak, terrorist attacks or earthquakes that are brutal enough to deplete local supplies. The company recognized approximately $180 million in revenue in 2009 from deliveries made to the Stockpile. Human Genome expects to deliver approximately 15,000 doses to the Stockpile in 2010.
Our Recommendation
We currently 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.
Read the full analyst report on “HGSI”
Read the full analyst report on “GSK”
Read the full analyst report on “NVS”
Zacks Investment Research