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Human Genome Sciences ( HGSI) has beaten lupus.

The Rockville, Md.-based drugmaker announced Monday that its experimental drug Benlysta achieved a clinically and statistically significant improvement in disease response compared with placebo, according to results from a pivotal phase III study of lupus patients.

If confirmed in a second phase III study due later this year, Benlysta likely will become the first new drug approved to treat lupus specifically in 50 years. Human Genome is partnered with GlaxoSmithKline ( GSK) for Benlysta's development and marketing.

The success of the Benlysta study is a signal achievement for Human Genome Sciences, placing the company on the path toward its first blockbuster product.

Human Genome shares were up 218.4% to $10.57 in Monday morning trading.

Study Results Should Surprise Many

The Benlysta win is also a bit of a surprise given the intractable nature of lupus -- a complex and hard-to-treat autoimmune disease with a notorious reputation as a drug development graveyard. For this reason and others, nearly all of the analysts covering Human Genome predicted Benlysta would fail.

They were wrong.

Human Genome reported that 57.6% of lupus patients responded to treatment with a high dose of Benlysta compared with 43.6% of lupus patients treated with a placebo. A lower dose of Benlysta also was tested, and it too demonstrated an improvement in disease response over placebo. The results were statistically significant.

The phase III study, known as BLISS-52, enrolled 852 patients with active lupus and treated them with Benlysta or a placebo for one year, making this the largest clinical trial ever conducted in lupus patients.

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Lupus is a chronic disease in which the body's immune system creates auto-antibodies that attack connective tissue, resulting in inflammation and tissue damage, often to the heart, joints, lungs and kidneys. Women are more often diagnosed with lupus than men, and the disease goes through periods where it flares up then goes into remission.

Learning From Failure

A previous phase II study of Benlysta in lupus failed, but Human Genome mined the negative results for evidence that the drug could still work in certain lupus patients, then used that knowledge to design the BLISS-52 study.

For starters, Human Genome limited enrollment in the phase III study to lupus patients with high levels of auto-antibodies, which suggested more active disease. These "sero-positive" patients made up about 75% of the patients in the failed phase II study and seemed to benefit from Benlysta more than so-called "sero-negative" patients.

The company also designed a novel primary endpoint for BLISS-52 that combined three different measures of disease response and activity. Each of the three components of the composite endpoint were familiar endpoints used in past lupus studies, but the combination was unique and had never been used before in a lupus clinical trial. The Food and Drug Administration signed off on Human Genome's trial design.

An old saw of drug development says that retrospective subset analyses from failed clinical trials rarely, if ever, lead to success in later studies. Add to this an entirely untested primary endpoint and it's understandable why the consensus view leaned heavily against Benlysta's success.

But Human Genome, like Dendreon ( DNDN) earlier this year, proved that sometimes drug development doesn't always follow the script.

The 14% absolute difference between the responses of the high-dose Benlysta patients and those on placebo was precisely the effect Human Genome expected when it designed the study.

In BLISS-52, Benlysta's rates of serious adverse events, infections and fatalities were comparable to placebo. The most common adverse events were headache, joint pain, skin rash, urinary tract infection and influenza, and also were comparable between Benlysta and placebo.

Benlysta is a human monoclonal antibody designed to recognize and tamp down the biological activity of B-lymphocyte stimulator, or BLyS, a substance that was discovered by Human Genome. High levels of BLyS plays a role in the development of abnormal B cells (B cells are a component of the immune system), and abnormal B cells lead to increased auto-antibody formation.

Benlysta appears to lower levels of BLyS and therefore stop young B cells from growing abnormally. One advantage to treating lupus with this approach is that Benlysta doesn't appear to affect more mature B cells, which are an important part of a patient's immune system.

Rituxan, the blockbuster cancer and autoimmune disease drug from Roche and Biogen Idec ( BIIB), works by depleting all B cells, but the drug has so far proved ineffective in lupus.

Human Genome was born from the genomics revolution of the 1990s, promising to deliver an era where a better understanding of genes and their link to disease would make drug development faster and easier.

Yet Human Genome was never able to live up to that promise. The company's research efforts generally disappointed. Drugs either failed or never lived up to expectations, while spending and debt soared. Human Genome's stock price, which topped $100 a share in 2000, dwindled over the years and actually sank below $1 earlier this year.

Benlysta is the first blockbuster drug to step out from Human Genome's labs. There are between 300,000 and 400,000 lupus patients in the U.S., with similar numbers in Europe. Not all these patients are sick enough or ideally suited for treatment with Benlysta, but the drug's peak revenue could still top $1 billion annually.

Human Genome and GlaxoSmithKline split the costs and profits from Benlysta equally. Results from a second phase III study, known as BLISS-72, are expected to be announced in November. If they confirm the results announced Monday, the two companies plan on seeking regulatory approval for Benlysta in the first half of 2010.
Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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