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Human Genome Shares Fall On Lazard Analyst Outlook

The Associated Press

NEW YORK (AP) — Shares of Human Genome Sciences Inc. reversed course Friday, giving back gains made from positive midstage data on a lupus drug candidate as a Lazard Capital analyst cast doubt on the treatment's ultimate success.

The stock lost 38 cents, or 11.9 percent, to reach $2.81 in afternoon trading. The movement is a reverse from Thursday, when the stock rallied 18 percent as the company said its drug candidate Benlysta reduced lupus symptoms over a four-year period in a study.

The long-term study comes ahead of expected late-stage clinical trial data in July. Results from a second late-stage study are expected in November. Several analysts said the midstage study results foreshadow positive results for the late-stage clinical trials. On Friday though, Lazard Capital Markets analyst Terence Flynn downgraded shares to "Sell" from "Hold" and issued a $1 price target while casting doubt on future clinical successes for the drug candidate.

"We continue to believe that the probability that this drug succeeds is extremely low," Flynn said, citing the design of the study and what he called "unimpressive" effectiveness in prior studies.

He also echoed sentiments of other analysts, calling lupus a difficult disease to treat. Lupus is a chronic disease where the immune system attacks the body's own tissue. On Thursday Leerink Swann Research analyst reaffirmed a "Outperform"rating on the stock, saying the recent study data bodes well for future results. Still, he only gave the drug a 60 percent chance of success.

Benlysta was previously called LymphoStat-B, and is being developed through a partnership between Rockville, Md.-based Human Genome Sciences and British drug maker GlaxoSmithKline PLC.

Meanwhile, Flynn took a cautious view on the company's hepatitis C drug candidate Albuferon, citing tough competition in that market.