Human Genome shares plummet 13 percent

Decline attributed to waning excitement over breakthrough

July 10, 1999|By Mark Guidera | Mark Guidera,SUN STAFF

Shares in Human Genome Sciences Inc. fell 13 percent yesterday as investors took profits and enthusiasm cooled for a gene breakthrough the biotechnology company announced Thursday.

Shares in the Rockville-based company closed yesterday at $47.93, down $7.56. Trading was heavy with more than 3.6 million shares changing hands.

The company disclosed Thursday that its scientists had discovered a human protein that triggers production of what are known as B cells. Those important white blood cells are responsible for signaling the body to start producing antibodies when invaders, such as bacteria and viruses, pose a threat.

Shares rocketed 35 percent late Thursday, closing at $55.50 after word of the pending announcement leaked. The journal Science published findings of the Human Genome scientists' research in yesterday's issue.

Salomon Smith Barney biotechnology analyst Meirav Chovav said in an advisory issued to the firm's investors yesterday that despite the scientific breakthrough, the protein, B Lymphocyte Stimulant, or BLyS, is "nonetheless in an extremely early stage of discovery."

She said that without human clinical data on the protein, the breakthrough did not warrant a $333 million increase in the market value of the company, which is what occurred in a few hours Thursday.

The analyst said the company, which has three experimental drugs in human trials, is "fully valued" at $40 a share.

Industry experts also noted that any experimental drugs the company might develop from the discovery would take five to eight years to clear regulatory hurdles before being considered for marketing approvals.

Human Genome's chairman and chief executive officer, William A. Haseltine, said yesterday that the company has a policy of not commenting on fluctuations of its stock price.

"I think this discovery is an important event for genomics," said Haseltine. "For years, people have been asking where's the beef. Well, now you have it. This is validation for a systematic discovery process that has multiple ramifications for medicine and science."

The company hopes to have an experimental B cell-based drug in human trials by late this year or early next year. It has not decided what immune-system disorder or disease it will target first for testing.

Company executives said the protein might have applications in boosting immune systems weakened by chemotherapy or organ-transplant drugs, and in treating deadly immune diseases such as AIDS, leukemia and lymphomas.

The company hopes to develop treatments that not only boost production of B cells, but also others that retard production in cases in which B cells are proliferating rampantly, as with some lymphatic cancers.

Pub Date: 7/10/99

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