Human Genome Sciences, Inc. (HGSI) reported third quarter net loss of $49 million or 32 cents per share, in-line with the Zacks Consensus Estimate. The company reported a net loss of $74.2 million or 50 cents in the year ago quarter. The lower net loss for the quarter was primarily attributable to increased revenues from manufacturing and development services and lower operating expenses.
Revenues for the quarter came in at $18.834 million which reflected an increase of 60.6%. Revenues were inclusive of $8.7 million from manufacturing and development services, $8.9 million recognized under the company’s agreement with Novartis (NVS) pertaining to hepatitis C drug Zalbin, and $1.0 million recognized under the agreement with GlaxoSmithKline plc (GSK) pertaining to the potential blockbuster lupus drug Benlysta. Research & development spend declined 36% to $34.8 million in the quarter. Selling general & administrative expenses declined 6.3% to $14.7 million in the reported quarter.
The company exited the quarter with cash and investments totaling $697.2 million, of which $627.6 million was unrestricted and available for operations. This reflects a significant increase over the total cash and investments of $372.9 million at the end of 2008, of which $303.6 million was unrestricted and available for operations. The increase in the quarter was attributable to the successful public offering of common stock completed in August 2009. Net Proceeds of the offering came in at $356.5 million.
During the quarter, Human Genome received an order from the US government to sell an additional 45,000 doses of ABthrax for the Strategic National Stockpile, to be delivered over a three-year period, beginning later this year. The company expects to receive approximately $152 million from this contract. This order is in addition to the 20,000 doses that were delivered to the Stockpile earlier this year.
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 flu outbreak, terrorist attacks or earthquakes that are brutal enough to deplete local supplies.
Positive results from Benlysta
Human Genome received a huge boost recently when Benlysta, which is being developed with Glaxo, met its primary endpoint in BLISS-76, a pivotal phase III study, through 52 weeks. BLISS-76 is the second phase III trial in seropositive patients with systemic lupus erythematosus (SLE). Positive results from the first trial, BLISS-52, were announced earlier this year.
The company intends to file a Biologics License Application (BLA) in the United States in the first half of 2010.We expect the US approval in early 2011.
Positive data from the Bliss-76 study brings the company a step closer to being the first to have a new lupus drug approved in 50 years. Lupus affects about 1.5 million people in the United States and 5 million worldwide.
Currently we are Neutral on Human Genome.
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