Despite higher revenue, Human Genome Sciences Inc., a developer of gene-based drugs, reported a significantly higher third-quarter loss yesterday, largely because of costs related to a recent acquisition.
The Rockville company, however, had warned Wall Street that a charge was coming when it acquired Principia Pharmaceutical Co. in September, and its losses met analysts' expectations apart from the acquisition-related costs.
The company also entered the fourth quarter brimming with $1.8 billion in cash and short-term investments, thanks to financing that included a $950 million public offering.
"I think they're very well positioned," Needham & Co. analyst Carolyn Pratt said. "One of the problems in the past was biotech companies were having to run pretty lean because they didn't have enough cash. This takes that out of the equation."
Excluding the one-time $134.1 million charge related to the purchase of Principia, Human Genome reported a quarterly loss of $13 million, or 12 cents a share, on revenue of $8.1 million. In the same quarter last year, the loss was $9.7 million, or 11 cents a share, on revenue of $7.4 million.
Analysts had predicted a loss of 13 cents per share, according to an average of estimates from 10 analysts surveyed by I/B/E/S International Inc.
Including the one-time write-off, Human Genome reported a loss of $147 million, or $1.33 per share.
The company reported the earnings after the close of the market. Shares closed at $95.94, up $2.88 or 3.1 percent on the Nasdaq stock market.
The results come on the heels of a busy autumn for Human Genome. Aside from the purchase of Principia and the $950 million public stock offering, Human Genome announced a number of agreements to work with other companies to develop drugs.
Last week, for example, Human Genome said it will develop a drug with Dow Chemical Co. for the treatment of cancers such as chronic lymphocytic leukemia, multiple myeloma and non-Hodgkin's lymphoma.
Human Genome has four experimental drugs in various stages of human testing. And last month it applied for FDA permission to test Albuferon, a treatment for Hepatitis C that Principia was developing.
Already undergoing human tests are Repifermin, a protein that apparently stimulates wound-healing; Mirostipen, a protein that could help protect the blood-forming tissues in bone marrow from chemotherapy, and BlyS, a protein that stimulates the immune system.
Testing was suspended on a fourth protein, Vascular Endothelial Growth Factor-2, after the Food and Drug Administration raised several concerns about the trials, including the case of a patient in the tests who died of a heart attack.
The drug was being tested as a stimulant for blood-vessel growth that might be used to treat heart disease.