Human Genome Sciences ( HGSI) provided biotech's biggest summer shocker Monday with positive results from a phase III study of the lupus drug Benlysta. The news drove Human Genome shares up 226.2% to $10.83 in recent trading. Shares of Benlysta partner GlaxoSmithKline ( GSK) were up 3.5% to $37.63. Thoughts and observations stemming from the announcement:
Still, expect there to be some uncertainty and worry about the BLISS-76, mainly due to the perception that different (read: better) treatment of lupus patients in the U.S. could (maybe, perhaps, possibly) be enough to trip up Benlysta the second time around. This worry, coupled with anticipation that Human Genome may try to leverage Monday's announcement to raise more money by selling stock, could keep a near-term lid on the stock price. (That's after Monday's meteoric rise of more than 200%, of course.)
Crunch those numbers, and you get a Benlysta patient population of roughly 200,000. Assume a 25% to 40% peak penetration and a $25,000 annual price, and you get Benlysta sales in the range of $1.25 billion to $2 billion. The European market is probably as big as the U.S. although perhaps not as easily reached commercially. Still, we're talking big numbers for Benlysta, which is why analysts are generally re-setting price targets for Human Genome into the middle to high teens.
Benlysta , the company's drug for lupus. Two phase III studies are under way, with data expected later this year. Lupus is an extremely tough disease, and the phase II data on Lymphostat-B produced mixed results. It's hard to call this anything more than a toss up."
Taking the Monday Morning Quarterback look back, I don't know if I would have changed my call. Lupus is a super-tough disease, and the prior Benlysta data coupled with all the changes and risks associated with the phase III study design made having confidence in Benlysta's success a challenge. But clearly that was the wrong call. I was too chicken to roll the dice. Kudos to all the investors out there who bucked consensus and made a lot of money today. (Listen to Adam Feuerstein and markets reporter Elizabeth Trotta break down the Human Genome announcement here.) Not all the analysts were predicting doom and gloom for Benlysta, so a right and proper shout-out of respect needs to go to Leerink Swann's Joe Schwartz, who gave Benlysta a 60% chance for success going into Monday's data release. Sixty-percent odds may not seem like much more than a toss up, but in this case, where all the other analysts were screaming, "FAIL, FAIL, FAIL," Schwartz was pretty much pounding the table in the other direction. Great call. Congratulations to Joe.
I think Rituxan might just work. Just a hunch. Only a clinical trial will tell us the answer for sure. Hello Roche? What are you going to do?
, or the BTK, can thank Human Genome for a very big day. The index is up 12% midday because Human Genome is the largest weighted component at 10.5%.