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 +'''Human Genome Sciences, Inc. ([[NYSE]]: HGSI)''' is a freshly minted commercial biotech company, with the approval of its flagship drug, Benlysta in 2011 to treat lupus. HGS uses three technologies to discover and develop drug candidates: gene-based functional protein technology, antibody technology (in-license from other companies) and albumin fusion technology.
-Human Genome Sciences, Inc. (HGSI) was incorporated and commenced operations on June 26, 1992. The Company is a development stage biopharmaceutical company with three products in late-stage clinical development: Albuferon for chronic hepatitis C, LymphoStat-B for systemic lupus erythematosus (SLE), and ABthrax for anthrax disease. HGS also has a pipeline of novel compounds in earlier stages of clinical development in [[Concept:Incidence of Cancer|oncology]], immunology and infectious disease. Additional products are in clinical development by its partners. HGS utilizes three technologies to discover and develop drug candidates: gene-based functional protein technology, antibody technology (in-license from other companies) and albumin fusion technology. +HGSI has entered into relationships with a number of leading pharmaceutical and [[Concept:Biotechnology|biotechnology]] companies. These collaborations have provided and will continue to provide research funding for the company. The Company's revenues are currently derived from license fees and milestone payments under collaboration agreements. The Company does not yet generate any revenues from product sales. In addition, HGSI partners with [[GlaxoSmithKline (GSK)]] for the commercialization of Benlysta.
- +HGSI's success will be significantly tied to Benlysta sales during the early days of its commercialization. In addition, HGSI may be a takeover candidate as big pharma looks to fill its ailing drug portfolio.
-The Company currently manufactures therapeutic protein and antibody drugs for clinical development and plans to manufacture drugs for initial commercial activity. HGSI completed construction and validation of a large-scale manufacturing facility and placed the facility into operational service in the third quarter of 2006. +==Business Growth==
 +On March 9, 2011, HGSI received approval for Benlysta as the first new treatment for Lupus in 50 years. Until that point, HGSI had been a research-focused biotechnology company. However, this approval marks the first point in the company's history that it will earn revenue from the commercialization of a drug. In the first quarter since the FDA approval, HGSI's '''losses tripled to $131 million''', as the company ramped up efforts toward full commercialization.
- +==Pipeline<ref>[http://www.hgsi.com/products.html Human Genome Sciences Pipeline]</ref><ref>[http://www.wikinvest.com/stock/Human_Genome_Sciences_(HGSI)/Filing/10-K/2011/F94403373#013 HGSI 2011 10K]</ref>==
-HGSI has entered into relationships with a number of leading pharmaceutical and [[Concept:Biotechnology|biotechnology]] companies. These collaborations have provided and will continue to provide research funding for the company. The Company's revenues are currently derived from license fees and milestone payments under collaboration agreements. The Company does not yet generate any revenues from product sales. +*'''Benlysta:''' Is an injectable antibody treatment that inhibits a protein (BLyS) that is known to be elevated in certain immune system diseases including Lupus. Benlysta received FDA approval to treat Lupus in March of 2011, and is currently in Phase 2 clinical trials for post-kidney transplant patients and patients with vasculitis. In addition, HGSI is pursuing a more convenient delivery method of Benlysta for treating Lupus patients.
-In June 2006, HGS completed the transaction establishing its CoGenesys division as an independent company, and CoGenesys announced the completion of a $55 million Series A financing. CoGenesys will focus on the early development of selected gene-based product opportunities and the monetization of certain HGS intellectual property and technology assets. The transaction was treated as a sale for accounting purposes. As a result of the transaction, HGS owns a 13% equity interest on a fully-diluted basis in the new company. HGS has granted CoGenesys exclusive rights to develop and commercialize biological products based on certain human genes discovered by HGS, and has granted CoGenesys a non-exclusive license to use its proprietary albumin-fusion technology to develop and commercialize certain albumin-fusion proteins. HGS is entitled to a portion of the revenue that CoGenesys receives from outlicensing or sales of certain therapeutic and diagnostic products successfully developed and commercialized. HGS also retains the right of first refusal prior to outlicensing by CoGenesys of several specific products that may be developed. In addition, HGS has the option to have CoGenesys perform pre-IND development work for up to two products per year, with reimbursement for expenses on a cost-plus basis. CoGenesys will be entitled to development milestone payments on any resulting products. +*'''Raxibacumab:''' Is an injectable antibody treatment that blocks the toxins that are released by the Anthrax bacteria. Current treatments available kill the bacteria itself, but are of little help once it has already released its toxins into patients. HGSI is responding to a complete response letter to the FDA requesting more information for approval to treat Antrax patients. HGSI has already earned revenue from the US Government, which has been buiding an emergency stockpile of the treatment.
-HGSI is based in Rockville, Maryland, with approximately 880 employees. The Company's common stock has been traded publicly since 1993 and is listed on the Nasdaq National Market System under the ticker symbol HGSI.+==Trends and Forces==
 +===The Commercial Success of Benlysta will Drive HGSI's Revenue===
 +As Benlysta ramps up in sales, a vast majority of HGSI's will be attributed to Benlysta revenue. Benlysta, which HGSI shares commercialization rights with [[GlaxoSmithKline (GSK)]], is widely predicted to become a blockbuster drug, with over $1 billion in sales, and analysts predict a 2012 sales range of $300 to $700 million.<ref>[http://biohealthinvestor.com/2011/03/benlysta-approval-cheat-sheet-what-you-need-to-know-hgsi-gsk.html Benlysta Approval Cheat Sheet: What You Need to Know]</ref> Exactly where Benlysta sales fall within the predicted ranges will significantly affect HGSI's overall revenue growth as well as their valuation.
-{{clr}}+===HGSI is a Relatively Cheap Takeover Candidate for Big Pharma===
 +As big pharma companies lose their biggest blockbuster medicines to generic competition, they increasingly look to acquisition of affordable companies to bolster their drug portfolio.<ref>[http://www.fiercebiotech.com/story/big-pharma-turns-its-deal-makers-swell-ph3-pipeline/2011-06-28 Big Pharma turns to its dealmakers to swell the Ph3 pipeline]</ref> HGSI has a potential blockbuster in Benlysta as well as other relatively late stage drugs. With a market cap under $10 billion, HGSI is an affordable takeover target for big pharma companies.
 +==Competition==
 +HGSI competes with a few companies with products already on the market that suppress the immune system and have been used to used to treat lupus:<ref>[http://www.marketwatch.com/story/enthusiasm-for-lupus-drug-fuels-hgs-shares-2009-11-30 Investors betting big on Human Genome's Benlysta]</ref>
 +*[[Biogen Idec (BIIB)]]: Makes the lymphoma treatment, Rituxan.
 +
 +*[[Roche Pharmaceuticals (RHHBY)]]: Makes immuno-suppressant, CellCept.
 +
 +
 +There are also several drugs in the pipeline being developed to treat Lupus:
 +
 +*[http://www.immupharma.com/lupus.html Immunupharma]: Is developing a phase III candidate, Lupuzor.
 +
 +*[[Eli Lilly and Company (LLY)]]: Has an antibody that inhibits an immune system protein (BAFF) in phase III clinical trials.
==References== ==References==

Current revision

Human Genome Sciences, Inc. (NYSE: HGSI) is a freshly minted commercial biotech company, with the approval of its flagship drug, Benlysta in 2011 to treat lupus. HGS uses three technologies to discover and develop drug candidates: gene-based functional protein technology, antibody technology (in-license from other companies) and albumin fusion technology.

HGSI has entered into relationships with a number of leading pharmaceutical and biotechnology companies. These collaborations have provided and will continue to provide research funding for the company. The Company's revenues are currently derived from license fees and milestone payments under collaboration agreements. The Company does not yet generate any revenues from product sales. In addition, HGSI partners with GlaxoSmithKline (GSK) for the commercialization of Benlysta.

HGSI's success will be significantly tied to Benlysta sales during the early days of its commercialization. In addition, HGSI may be a takeover candidate as big pharma looks to fill its ailing drug portfolio.

Business Growth

On March 9, 2011, HGSI received approval for Benlysta as the first new treatment for Lupus in 50 years. Until that point, HGSI had been a research-focused biotechnology company. However, this approval marks the first point in the company's history that it will earn revenue from the commercialization of a drug. In the first quarter since the FDA approval, HGSI's losses tripled to $131 million, as the company ramped up efforts toward full commercialization.

Pipeline[1][2]

  • Benlysta: Is an injectable antibody treatment that inhibits a protein (BLyS) that is known to be elevated in certain immune system diseases including Lupus. Benlysta received FDA approval to treat Lupus in March of 2011, and is currently in Phase 2 clinical trials for post-kidney transplant patients and patients with vasculitis. In addition, HGSI is pursuing a more convenient delivery method of Benlysta for treating Lupus patients.
  • Raxibacumab: Is an injectable antibody treatment that blocks the toxins that are released by the Anthrax bacteria. Current treatments available kill the bacteria itself, but are of little help once it has already released its toxins into patients. HGSI is responding to a complete response letter to the FDA requesting more information for approval to treat Antrax patients. HGSI has already earned revenue from the US Government, which has been buiding an emergency stockpile of the treatment.

Trends and Forces

The Commercial Success of Benlysta will Drive HGSI's Revenue

As Benlysta ramps up in sales, a vast majority of HGSI's will be attributed to Benlysta revenue. Benlysta, which HGSI shares commercialization rights with GlaxoSmithKline (GSK), is widely predicted to become a blockbuster drug, with over $1 billion in sales, and analysts predict a 2012 sales range of $300 to $700 million.[3] Exactly where Benlysta sales fall within the predicted ranges will significantly affect HGSI's overall revenue growth as well as their valuation.

HGSI is a Relatively Cheap Takeover Candidate for Big Pharma

As big pharma companies lose their biggest blockbuster medicines to generic competition, they increasingly look to acquisition of affordable companies to bolster their drug portfolio.[4] HGSI has a potential blockbuster in Benlysta as well as other relatively late stage drugs. With a market cap under $10 billion, HGSI is an affordable takeover target for big pharma companies.

Competition

HGSI competes with a few companies with products already on the market that suppress the immune system and have been used to used to treat lupus:[5]


There are also several drugs in the pipeline being developed to treat Lupus:

  • Immunupharma: Is developing a phase III candidate, Lupuzor.

References

  1. Human Genome Sciences Pipeline
  2. HGSI 2011 10K
  3. Benlysta Approval Cheat Sheet: What You Need to Know
  4. Big Pharma turns to its dealmakers to swell the Ph3 pipeline
  5. Investors betting big on Human Genome's Benlysta
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