HGS acquires a promising drug process

Human Genome buys Principia for $120 million

Rights to fusion technique

New process may let medicine last longer, reducing dosages

Acquisitions

September 12, 2000|By Julie Bell | Julie Bell,SUN STAFF

Human Genome Sciences Inc. announced yesterday that it had paid about $120 million in stock for a company with rights to a technology designed to make protein drugs last longer in the body, potentially reducing dosages for patients.

Human Genome's announcement that it had acquired Principia Pharmaceutical Corp., a privately held biopharmaceutical company based in Norristown, Pa., comes as it makes significant progress in moving the first of its experimental gene-based drugs through development.

The Rockville-based company's repifermin protein has shown promising results in helping to heal ulcers on the skin of the lower leg and ankle in a second round of testing on humans. Human Genome, which has released preliminary results of those tests, plans to release more detailed results this week.

Human Genome said it expects to incur a "significant" one-time charge for research and development expenses related to Principia. The Pennsylvania company will become a wholly owned subsidiary of Human Genome Sciences and will continue to be headed by its founder and president, Christopher P. Prior.

Analyst Michael G. King of FleetBoston Robertson Stephens Inc. warned that the acquisition, which requires the issuance of 820,000 Human Genome shares, is likely to cause volatility in the company's stock over the next several days.

But King and Carolyn Pratt, an analyst at Needham & Co., agree the acquisition will be positive over the long run, potentially giving Human Genome improved drugs of its own and technology to license to other drug companies.

Shares of Human Genome closed regular trading yesterday at $155, down $9.4531, or 5.75 percent.

In Principia, Human Genome gets a company that has focused on solving a key problem with many biopharmaceuticals: They often do not last long in the bloodstream, leading to higher doses and frequent injections.

To make the drugs work longer, Principia has developed a way to genetically fuse albumin - an inert protein that naturally occurs in the blood and lasts longer than many others - with other proteins used in therapy.

The company's fused drugs have yet to be tested in people, and Principia is reluctant to predict how much dosages can be reduced.

Prior, Principia's president, said the company hopes its Albuferon - a fusion drug of alpha interferon and albumin - will "significantly" reduce the dosage of alpha interferon required to treat patients with chronic hepatitis C.

Hepatitis C patients today are given alpha interferon injections daily or three times a week, and many can't tolerate the drug for more than 12 months because of side effects ranging from nausea to depression, he said.

Principia is preparing an application for human testing of both Albuferon and Albutropin, a fusion protein of human growth hormone and albumin designed to treat adults with growth hormone deficiency.

Arthur M. Mandell, Human Genome's senior vice president of corporate and business development, said the fusion technology also is expected to be used to improve Human Genome-developed drugs as well as be licensed to other drug companies.

Craig Rosen, Human Genome's executive vice president for research and development, said Principia's technology could help keep manufacturing costs for therapeutic proteins in check.

As it is, Rosen said, Human Genome must design an individual process to make and recover each protein from the vats of cells and other material used to produce it.

Principia's technology efficiently produces each fused protein in much the same way, but albumin creates a handle, of sorts, by which the fused proteins can be grabbed and harvested. That means roughly the same manufacturing process could be used no matter what therapeutic protein is being made.

Principia, which employs 22, will remain headquartered in Norristown.

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