Human Genome poised for biggest day in its history

DNA in an undated image.

BOSTON (Reuters) - Human Genome Sciences Inc (HGSI.O) is preparing to release data on Monday that could transform it from wallflower tobiotech belle of the ball.

The company will be reporting data from the second of two late-stage trials of its experimental lupus drug Benlysta, and all eyes are on the results.

If successful, Human Genome and partner GlaxoSmithKline Plc (GSK.L) will have a drug worth as much a $3 billion a year, according to some analysts -- nice for Glaxo, the world's No. 2 drugmaker, and transformational for Human Genome, a small Rockville, Maryland-based company that has struggled in the shadows for years.

Glaxo and Human Genome will share profits from Benlysta on a 50-50 basis.

Results of the trial, known as BLISS-76, must show that Benlysta improves symptoms of lupus -- a complex disease that causes the immune system to attack the body's own tissue and organs -- by a statistically significant amount.

If it does, the companies say they will file for approval of the drug with the U.S. Food and Drug Administration in the first quarter of 2010. It could be on the market by the end of next year.

Many investors think the trial is more likely to succeed than fail. As of October 15, only 13 percent of the company's regularly traded shares were held "short" by investors betting the stock will fall. And 10 out of 14 analysts polled by Thomson Reuters have a "buy" recommendation on the stock.

"We assign a 70 percent probability of success," said J.P. Morgan analyst Cory Kasimov in a research report. However, he stressed that making a bet of this nature may not be for everyone.

"Given the importance of this study, and continued hesitance on the part of some investors, we suspect this event could trigger a single-day move in Human Genome's shares of 50 percent plus or minus," he said.

Data released on July 20 from the first trial, known as BLISS-52, showed that 57.6 percent of patients who took a high dose of Benlysta saw an improvement in their symptoms compared with 43.6 percent who took the placebo -- a highly significant result that sent Human Genome's stock up more than 200 percent that day.

But some investors are concerned that the strong results shown in the first trial may not carry over into the second.

"We continue to see significant risk to confirmation of BLISS-52 results and would take a wait-and-see approach," said Jim Birchenough, an analyst at Barclays Capital, in a research note.

Patients in the BLISS-52 trial mainly came from Latin America, Asia and Eastern Europe. Patients in the BLISS-76 trial mainly came from the United States and Western Europe.

Though the structure of the trials are similar, the disease is complex and some believe there is the potential for genetic differences, as well as slight variations in the background treatment, to affect the results.

Patients in the trials either received Benlysta in combination with current standard of care, which typically includes immunosuppressant drugs such as Roche Holding AG's (ROG.VX) Cellcept and steroids such as prednisone, or standard of care plus a placebo.

Lupus affects about 1.5 million people in the United States and 5 million worldwide, according to the Lupus Foundation of America.

Benlysta, which is given once a month by IV infusion, is designed to inhibit BLyS, a naturally occurring protein in the body that exists to keep B-cells functioning normally. B-cells make antibodies that prevent infection. In patients with lupus, B-cells are overstimulated and produce antibodies that attack the body.

Symptoms of lupus include achy joints, fever, arthritis, kidney damage, chest pain and skin rash.

If approved, Benlysta will be the first drug to be approved for lupus in 50 years. Other drugs are used to treat the disease but are not specifically approved for it.

Human Genome's shares were down 0.9 percent to $19.79 in early Friday afternoon trading on Nasdaq, up 44 times from their year low of 45 cents a share in March.

(Reporting by Toni Clarke; Editing by Tim Dobbyn)