This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Human Genome Hit by Benlysta Sales Worry

BETHESDA, Md. ( TheStreet) -- Human Genome Sciences (HGSI) shares dropped Wednesday as investor concerns shifted from approval of its lupus drug Benlysta to the potential for a narrower-than-expected label and a slow commercial launch.

Two downgrades Wednesday morning, one each from Citi and Bank of America/Merrill Lynch, reflected these new concerns and sent Human Genome shares down 7% to $23.98 in early trading.

An advisory panel convened by the U.S. Food and Drug Administration voted 13-2 Tuesday night to recommend Benlysta's approval as the first new lupus therapy in 50 years.

The large margin of victory represented in the vote count, however, belied the contentiousness of the panel's discussion over Benlysta's efficacy. Many of the panelists expressed concern that Benlysta provided only a marginal benefit for U.S. lupus patients and that some specific types of lupus patients -- African Americans or those with lupus that attacks the kidneys or the central nervous system -- were not helped by the drug at all.

Despite recommending Benlysta's approval, the FDA panel expressed support for a label that potentially restricts the drug's use to a smaller segment of U.S. lupus patients than Wall Street had expected.

"The label will likely have noticeable restrictions and thin efficacy is already drawing a mixed reception from rheumatologists. We are concerned about the long-term sales potential given (1) modest benefit, (2) poorer activity in U.S. pts than we originally expected, and (3) now more restricted label," wrote Citi biotech analyst Yaron Werber in note Wednesday in which he downgraded Human Genome to a hold from a buy.

Werber cut his peak sales estimate for Benlysta to $1.6 billion from $2.6 billion and as a result his Human Genome price target dropped to $30 from $35.

Similarly, Bank of America/Merrill Lynch downgraded Human Genome to underperform with a $24 price target.

Investors are also concerned that FDA and Human Genome may not be able to resolve the outstanding issues needed to complete the Benlysta review in time to meet the Dec. 9 approval decision date. This increases the likelihood that Benlysta's approval could be delayed 1-3 months.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
GSK $44.24 0.20%
AAPL $129.96 -0.44%
FB $80.44 0.19%
GOOG $539.18 0.97%
TSLA $248.35 -0.44%

Markets

DOW 18,011.94 -28.43 -0.16%
S&P 500 2,109.60 -2.13 -0.10%
NASDAQ 5,076.5240 -6.4050 -0.13%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs