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It's Crunch Time for Companies With Products in the Pipeline

The three drugs at a turning point this year include therapies for lupus, rheumatoid arthritis, hepatitis and cancer. The outcome is far from a sure thing, but analysts said this is an important year for Human Genome Sciences and H. Thomas Watkins, its new chief executive.

"Watkins has either walked into cake-and-candy land or he's going to really have a bad year," said Alexander Hittle, an analyst with AG Edwards. "We're going to get a pretty good indication of whether or not things are working there."

MedImmune hopes to sell an improved version of its nasal-spray flu vaccine. (Jim Graham For The Washington Post)

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The three drugs are the furthest along among a number of treatments the company has in development. Hittle said investors are especially interested in this year's results for the drug Lymphostat-B. Designed to inhibit stimulation of antibodies that attack the body's tissue and cause painful diseases such as rheumatoid arthritis and lupus, Lymphostat-B could be a breakthrough for arthritis treatment or the first lupus drug to hit the market in 50 years. Or both. Or neither.

Human Genome Sciences is expected to announce results from the small-scale tests of Lymphostat-B for rheumatoid arthritis this spring and for lupus in the fall, as well as results of similar mid-stage tests on drugs for hepatitis and several forms of cancer tumors.

Though the drugs could be worth several hundred million dollars a year in revenue for a company that's never turned a profit, Watkins said, "I don't think there's a scenario under which it's going to be a super-negative year because even if some of the data is not 100 percent positive, we're going to have other opportunities in the future."

Watkins has spent several weeks immersing himself in the company's operations, meeting with employees and getting briefed on the products in development. The upcoming test results will give him the best indication, he said, of where he will take the company.

"We'll know which direction we're going," he said. "We will be driven by the data."

Early this year, Advancis Pharmaceutical Corp. is expected to announce final results of human tests on a new version of the antibiotic amoxicillin. It uses the company's slow-release technology to allow once-a-day doses of a medicine that currently must be taken several times a day. The potential market is large: More than 62 million prescriptions were written for amoxicillin in 2003, and annual sales of the antibiotic are $500 million a year, the company said.

The Germantown company is in a race against time, having reported that it has only enough cash to operate through the first quarter of 2006.

In October, Advancis announced that GlaxoSmithKline was ending a partnership to use the slow-release technology with a different antibiotic, Augmentin, sending Advancis stock plunging 62 percent. A month later, the company laid off 19 people -- 18 percent of its staff -- and delayed clinical trials of several other antibiotics using its technology.

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