Human Genome Sciences
jumped Tuesday after reporting that it's losing less money than before.
The Rockville, Md.-based biotechnology company said its fourth-quarter and full-year losses were less than expected and narrower than a year earlier. As a result, shares jumped 6.5% in late morning trading to $13.70, up 84 cents.
The earnings report was issued a week after Human Genome Sciences said it was halting all work on repifermin, an experimental treatment for mucositis, which is an inflammation of the mouth lining caused by cancer therapy. Repifermin failed to meet its goals in the second of three phases of tests on humans before a drug is submitted for marketing approval to the Food and Drug Administration. The drug previously had failed to meet goals in tests as a treatment for ulcerative colitis and chronic venous ulcers.
In Tuesday's financial report, the company reported that for the fourth quarter ended Dec. 31, it lost $48.9 million, or 38 cents a share. That beat the Wall Street analyst consensus by 3 cents. The loss for the same period in 2002 was $59.8 million, or 46 cents a share. Quarterly revenue jumped to $4.6 million from $600,000.
For the year ended Dec. 31, Human Genome lost $185.3 million, or $1.44 a share. The consensus of 15 analysts polled by Thomson First Call called for a loss of $1.47 a share. The company lost $219.7 million, or $1.71 a share, in 2002. Year-end revenue rose to $8.2 million from $3.6 million.
"We made substantial progress" last year, CEO William Haseltine said in a conference call Tuesday. He added that the company is in "a strong financial" position to pursue a number of goals this year, including further testing of experimental drugs for rheumatoid arthritis and Hepatitis C.
At year-end the company had $979.3 million in cash and short-term investments, excluding $280.8 million in restricted investments. At the end of 2002, it had nearly $1.29 billion in cash and short-term investments plus another $205.4 million in restricted investments.
"Our strong balance sheet, with substantial reserves, continues to provide strategic benefit," said Steven C. Mayer, the company's chief financial officer. "We believe these resources are sufficient to cover our operating expenses over the next several years."
One of the company's most intriguing experimental products is ABThrax, which is being tested to prevent and treat anthrax. The company has completed enrolling patients in the first-phase clinical trials of the drug. It expects to present results at the American Society of Microbiology's Biodefense meeting held the from March 7 to March 10 in Washington, D.C.
The drug has been granted an accelerated review by the FDA, but the company noted that further development of the drug depends on government funding. Financial support for bioterrorism drug research has been tangled up in congressional budget debates.