Shares in HGS climb 9.3%

Company announces it's ready to test immune-system drug


June 24, 2000|By Rona Kobell | Rona Kobell,SUN STAFF

Shares in Human Genome Sciences Inc. rose 9.3 percent yesterday after the company announced that it is ready to start human clinical trials of a drug to treat immune system disorders.

The Rockville-based company made the announcement at 4:15 a.m. yesterday, prompting heavy trading in the early morning hours that drove the share price to as high as $150. It closed at $145.375, up $12.375.

The company said the announcement was made at such an unusual hour to make newspapers' Internet editions.

Human Genome said it will include 50 to 100 patients in the testing of B-lymphocyte stimulator, or BLyS, a naturally occurring human protein that the company hopes to use as a platform to develop other drugs.

BLyS (pronounced "bliss") will first be tested on people with common variable immunodeficiency, or CVII, a group of disorders that make those they afflict highly prone to infections such as pneumonia, bronchitis and sinusitis. Several thousand people are thought to suffer from the disorder, said Kate de Santis, director of corporate communications and investor relations for Human Genome.

The company has not selected patients, but de Santis said CVII sufferers are easy to find because they live near research universities and are willing to be tested, as they have so few treatment options.

Dr. William Haseltine, Human Genome's chairman and chief executive officer, described BLyS as the "on switch" for human antibodies. He has predicted that the experimental drug could boost immune systems weakened by chemotherapy, organ transplants, leukemia and AIDS.

"This is a drug that a lot of people have looked for for a long time," Haseltine said in a RadioWall- interview yesterday.

Analysts had anticipated news of the trials since July, when results of the BlyS study were reported in the journal Science. At the time, scientists heralded BlyS as a breakthrough in the treatment of immune-system disorders.

Heather D. Morris, a biotechnology analyst at Janney Montgomery Scott in Philadelphia, said the market's response to Human Genome's announcement reflects more than excitement over BLyS.

"It validates the genomics method of discovering drugs, instead of the old way - sort of the needle in the haystack approach," she said.

The first human trials are expected to last nine months. After that, Haseltine said, he expects to expand the trial to more than 100 patients to glean statistical data.

Human Genome has no drugs on the market, though with BlyS it has four drugs in human trials. They are KGF-2, which is being developed to treat chronic wounds, ulcerative colitis and mucositis; and MPIF, to treat the side effects of chemotherapy and VEGF-2, a treatment for vascular diseases it is co-developing with Vascular Genetics Inc. Human testing on VEGF-2 has been suspended because of regulatory issues.

BlyS must undergo several years of human testing before it would even come before the Food and Drug Administration for review. For that reason, Lehman Brothers senior biotechnology analyst Joe Dougherty regards Human Genome's market capitalization - up around $675 million to $7.930 billion yesterday - as disproportionate to the weight of the BlyS announcement.

"I think it's a little early to be valuing this product that's just hit human trials at anything like that number," said Dougherty, who also has a doctorate in bio-organic chemistry. "It's just looking too narrowly."

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