Human Genome Sciences, Inc. (HGSI)
Q4 2011 Earnings Call
February 27, 2012; 04:30 pm ET
Thomas Watkins - President & Chief Executive Officer
David Southwell - Executive Vice President & Chief Financial Officer
Barry Labinger - Executive Vice President & Chief Commercial Officer
Joseph Schwartz - Leerink
Cory Kasimov - JPMorgan
Christopher Raymond - Robert Baird & Co.
Mark Schoenebaum - ISI
Vishaal Turakhia - Goldman Sachs
Jim Birchenough - BMO Capital
Marko Kozul - ThinkEquity
Geoff Porges - Bernstein
Michael Yee - RBC Capital Markets
Rachel McMinn - BOA Merrill Lynch
Ying Huang - Barclays Capital
Yaron Werber - Citi
Brian Skorney - Brean Murray
Do Kim - Piper Jaffray
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Good day everyone and welcome to Human Genome Sciences’ fourth quarter 2011 and full year financial results webcast. Today’s webcast is being recorded. At this time I will turn things over to Mr. Tom Watkins. Please go ahead Mr. Watkins.
Thank you operator and good afternoon everyone. Before we begin, I would like to point out that we will be making forward-looking statements, which are based on our current intent, belief and expectations. These statements are subject to certain risks and uncertainties and I encourage everyone to take a look at our SEC filings for additional detail. So the press release that we issued just a few minutes ago is posted on our website at
Following my opening remarks, David Southwell, Executive Vice President and Chief Financial Officer will review some highlights of our fourth quarter and full year 2011 financial results and then Barry Labinger, Executive Vice President and Chief Commercial Officer will review a few aspects of our progress to-date with the commercialization of BENLYSTA. Following those remarks we will open the call to any questions that you may have.
2011 was an important year for Human Genome Sciences’. In March the FDA approved BENLYSTA in the United States for the treatment of systemic lupus. Two weeks later we had BENLYSTA available in distribution channels and in late March the first US patients received treatment.
In July, we and our partner GlaxoSmithKline received approval for BENLYSTA in Europe and as we moved through the second half of the year, we launched BENLYSTA first in Canada, then in Germany, Spain and a number of other European Countries. Here in the United States BENLYSTA was on the market for three full quarters of last year and we saw steady quarter-to-quarter progress with BENLYSTA sales throughout those quarters.
We believe that BENLYSTA is on it’s way to playing a major role in improving the standard of care for SLE patients. Unquestionably the approval and launch of BENLYSTA brings us closer to our longstanding goal of achieving profitability and sustained growth into the future and HGS remains committed to achieving profitability in 2014.
At this point I will turn the call over to David Southwell, for a view of some of financial highlights. David.
Thanks Tom. I don’t plan to go through the 2011 numbers in detail since you have them in the press release, but I would like to draw your attention to a few specific highlights.
First, revenues for the full year totaled $131 million and that included $52 million in net sales of BENLYSTA, as well as $53 million in sales of raxibacumab. We launched BENLYSTA right at the end of the first quarter of 2011 and since then BENLYSTA net sales grew from $8 million in the second quarter to $18 million in the third quarter, to $26 million in the fourth quarter. So as Tom said earlier, we saw steady quarter-to-quarter growth in BENLYSTA sales throughout the year.
Overall revenues for 2011 were lower than for 2010, since results for the first three quarters of 2010 reflected recognition of $83 million from the ZALBIN agreement with Novartis, which was concluded in 2010. We ended 2011 with $881 million in cash and investments, which includes $429 million in net cash from our public offering of convertible senior notes, which we completed in November. We continue to have a strong financial position and will continue to invest in the successful worldwide commercialization of BENLYSTA.
So now I’ll turn the call over to Barry Labinger for an update on our progress with BENLYSTA. Barry.
Thanks David and good afternoon everyone. As Tom and David have indicated, BENLYSTA sales grew steadily from quarter-to-quarter in 2011. The majority of rheumatologists who’ve initiated the use of BENLYSTA are in the trial mode, prescribing it to a few appropriate patients to gain real world experience before expanding adoption.
The new news that I’m happy to report today is that there is a growing body of evidence from market research that BENLYSTA is performing well in the real world. These market research data suggest that patients on BENLYSTA are experiencing significant improvement and the rheumatologists with the most BENLYSTA experience are the most impressed with BENLYSTA’s efficacy.
As an example, we just completed a new market research study, involving short reviews of SLE patients treated with BENLYSTA. We captured the clinical experience for 270 patients treated by 80 rheumatologists. Here are few of the key findings and please remember that these findings come from a market research study, not from the clinical data underlying our label.
First, three quarters of the patients receiving BENLYSTA showed improvement in at least one aspect of the disease. About 20% of the patients were unchanged and very few who worsened. Some of these patients have only been treated with BENLYSTA for a very short period of time and those treated longer showed more improvement.