Md. firm cracks code of bacteria Human Genome stock rises more than 20%, to $39.75 per share

Vaccine, antibiotics expected

Staph A organism causes infection common in hospitals

January 19, 1996|By Mark Guidera | Mark Guidera,STAFF WRITER

Human Genome Inc., the Rockville-based firm attempting to map the entire human genetic code, said yesterday that it had cracked the genetic sequence of the dreaded bacteria that causes a common hospital infection. The company said it would work with another Maryland company to develop a vaccine and antibiotics to treat the infection.

On word of the breakthrough, the company's shares rocketed more than 20 percent to a new high briefly before closing in

heavy trading at $39.75 per share. For the day, Human Genome's stock was up $8.25.

Almost 1 million of Human Genome's 5 million outstanding shares traded hands yesterday. During the afternoon, the stock hit a 12-month high of $41.25.

The trading frenzy occurred even though the development of any vaccine or antibiotics from the findings is several years off at best, and there is no guarantee that any medicines will ever be forthcoming.

The company sequenced the genetic code of the potentially deadly bacteria known as Staphylococcus aureus, or Staph A.

Dr. William A. Haseltine, Human Genome's chairman and chief executive officer, said he did not think the stock market overvalued the company yesterday. He is confident a vaccine or antibiotics can be developed now that the genetic code of Staph has been mapped.

"This is a true milestone on our path to address what really is a looming threat in medi-cine," he said. "We've opened up a whole new path to develop therapies."

It took the company just four weeks to crack the code -- a development which, if nothing else, shows just how advanced the company is in its understanding of how to sequence genomes, the building blocks of all life.

Human Genome's scientists will collaborate with scientists at Rockville-based MedImmune Inc. to develop a vaccine to prevent infection from Staph A. MedImmune also will explore whether new antibiotics can be developed.

MedImmune's stock rose yesterday on the news, jumping $2.50, or more than 10 percent, to close at $19.25. Almost 750,000 shares were traded.

Investor interest yesterday was fueled mainly by the expectation that should Human Genome and MedImmune be able to develop a vaccine, the market potential would be huge.

But the development of such a vaccine is likely to be many years off, though access to the entire genetic sequence to a bacteria could potentially trim years off the average time it takes to develop a vaccine or antibiotic for it.

The companies also face the huge expense and time of human trials and of landing Food and Drug Administration approval for the marketing of any new drugs.

As for the market potential for new treatments developed from Human Genome's breakthrough, an estimated 9 million Americans are infected by the Staph A bacteria annually. Most cases are mild forms of infection. But the bacteria is frequently picked up in hospitals during surgery.

In rare cases the infection can be so severe that it can lead to a life-threatening condition called toxic shock.

The Staph A bacteria is not to be confused with the streptococcus bacteria, the so-called "flesh-eating" bacteria.

Dr. James F. Young, senior vice president for research and development at MedImmune, said he sees a great need for new treatments because Staph A is increasingly resistant to current antibiotic therapies.

Dr. Haseltine believes genetically engineered vaccines and drugs to treat the bacteria will be in strong demand in the near future because of this growing resistance to virtually all antibiotics historically used to treat it.

"Without new therapies, hospitals will be thrown back to the pre-antibiotic era," he said.

The effort to jointly develop a vaccine and antibiotics for Staph A is part of an alliance MedImmune and Human Genome formed in July 1995 to develop anti-bacterial vaccines and immunotherapies to treat and prevent bacterial infections.

Mark Kaufmann, director of investor relations for MedImmune, said the companies' agreement calls for a sharing of profits should a vaccine or antibiotics be developed and approved for marketing.

Under the agreement, Human Genome is to sequence the genomes of non-human organisms and look for proteins the genes produce that might be used to develop medicines to treat the disease. MedImmune is to develop treatments, and produce and market the vaccines or drugs that result from the research.

The two companies already are working on developing new treatments for the first organism Human Genome sequenced under the collaboration, an influenza organism that causes pneumonia, bronchitis and ear infections.

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