Human Genome Sciences Inc., which has seen its shares rocket more than 350 percent in a year, said yesterday that it would split its stock 2-for-1 this month. The split, the company's first, will occur Jan. 28 for stockholders of record Jan. 14.
William A. Haseltine, Human Genome's president and chief executive officer, said the Rockville company's board decided to approve the split in part because the company's shares were being sought by a growing number of large institutional investors and retail buyers.
"It's clear there is a much broader enthusiasm for HGSI shares now than just even a year ago," Haseltine said.
The executive said deepening investor acceptance was being driven, in part, by growth within the industry as genomic companies large and small have developed businesses that are generating customers as well as revenue, and in part by Human Genome's efforts to develop its own stable of drugs.
"We've now got a critical mass in the industry, and more people are beginning to see that what we do will be really important," Haseltine said.
An increasing number of investors, he said, are also beginning to believe that "we have a real shot at developing blockbuster drugs."
The 15-year-old company, which has derived most of its revenue from licensing access to its gene database to pharmaceutical companies, is one of a few gene research companies focusing resources on developing new medical treatments from its vast storehouse of genomic data.
The company has three experimental drugs in clinical trials, including a gene-based treatment for vascular disease and protein-based drugs for wound healing and protecting bone marrow from the debilitating effects of chemotherapy. Others are in preclinical development.
Even after the split, shares will still trade for a premium.
The company lost $24.2 million on revenue of $23.7 million during the nine-month period ending Sept. 30. Shares, which sold for a high of $33.375 in January 1999, have rocketed 360 percent since, hitting a 12-month closing high of $159.5625 Dec. 30.
Shares closed yesterday at $145.625, up $7.375.
Much of the run-up in the company's stock price has occurred since August, when investors began flocking to the genomics sector, betting that it may reap big financial rewards from new drugs developed from gene research.
A number of companies in the industry, including PE Corp.-Celera Genomics Group of Rockville, have seen share prices soar as well, though some companies saw profit-taking in their shares this week.
Human Genome's stock split will increase the number of common shares to almost 50 million. As of Jan. 4, there were approximately 23.3 million shares outstanding, according to the company.