Human Genome Sciences
rose 3.2% on Wednesday after an upgrade by SunTrust Robinson Humphrey, which said investors don't fully appreciate the company's prospects.
Investors have soured on Human Genome by focusing on what the company lacks, namely a chief executive and profitability. But SunTrust analyst David Witzke upgraded the company to buy from neutral, while establishing a 12-month price target of $16, telling investors the company "has an emerging pipeline with blockbuster potential along with a strong balance sheet and large-scale manufacturing assets."
"While uncertainty remains, we believe the right CEO could reinvigorate Human Genome and positively change the way investors view Human Genome's prospects," said the analyst, in his upgrade. (SunTrust does and seeks to do business with the companies mentioned in research reports.)
In reaction, shares of Human Genome rose 36 cents to $11.54.
In Witzke's view, Human Genome's four most promising products are showing steady progress in the earlier stages of clinical trials, with Phase 2 results expected in 2005. Specifically, the analyst said enrollment for a study of the company's lupus treatment, LymphoStat-B, which was granted fast-track status by the FDA, was ahead of schedule, with results possibly coming in late 2005.
"There is currently a lack of effective therapies for moderate and severe lupus, and if proven safe and effective, we believe LymphoStat-B could be on the market by the second half of 2006," said the analyst.
With the Senate's May 20 approval of "Project Bioshield," a $5.6 billion, 10-year effort to stockpile drugs and vaccines to prevent bioterrorism, Human Genome could get another boost. The company makes ABthrax, which could be used as an anthrax antidote, but has not been approved by the FDA.
If the bill is signed into law and the government shows interest in the anthrax drug, Witzke said the company could rekindle the ABthrax program.