A headline on a Jan. 24 Business article incorrectly implied that Human Genome Sciences ended tests of its hepatitis C drug Albuferon. The tests of a higher-dosage version ended.
HGS Stock Dips After It Ends Hepatitis C Test
Thursday, January 24, 2008
Human Genome Sciences' stock price plunged more than 40 percent yesterday, after the company announced it would abandon higher-dose tests of its hepatitis C drug because an independent monitoring group expressed concerns about lung-related side effects.
Shares of the Rockville biopharmaceutical company dropped 44 percent, or $4.40, to $5.62, hitting a 12-year low after adjusting for dividends and stock splits.
Human Genome, which in 16 years has not yet brought a commercial drug to market, said that during a routine review, an independent drug-monitoring committee recommended lower doses of Albuferon for chronic hepatitis C. The committee said it found "serious pulmonary adverse events" that were higher in the treatment of a trial group got arm injections of 1,200 micrograms of the drug every two weeks, compared with a separate group given doses of 900 mcg.
The company gave few details on the rate of side effects but said the pulmonary problems were "expected and rare" in interferon therapy.
H. Thomas Watkins, president and chief executive of Human Genome Sciences, described the announcement as a "hiccup" and said the recommendation by the Data Monitoring Committee isn't expected to delay the Phase 3 trial of Albuferon, which was predicted to finish by spring 2009. Filing for global marketing approval is expected to be complete by fall 2009.
Watkins said the company had expected to market the lower dosage of the drug and that the trials for the higher drug won't impede progress for the 900-mcg dose or Food and Drug Administration approval.
"The data committee didn't express any concerns with the 900-mcg dose, and for some time we've viewed the 900-mcg dose as the most likely marketed dose," Watkins said in an interview. The company began its first trial of the drug in March 2001 and is in the final stages of trials before it can get approval from the FDA to sell the drug commercially.
Human Genome Sciences, which has 770 employees, this year entered its most critical stage, with the hepatitis C drug and a drug for treating lupus in final trials before commercialization.
Han Li, a research analyst in New York for Stanford Group, said the concerns raised could affect perceptions of the drug.
Trial participants could drop out of the tests because of worries over the drug's side effects, which could affect the progress of the trials, Li said. When taken to market, doctors may think of the problems faced during the trials and weigh the potential safety concerns against the convenience of taking Albuferon once every two weeks. Its competitor, Roche's hepatitis drug Pegasus, is taken every week.
"If you want to get a drug to compete with Pegasus, which dominates the market and has been out for a few years, you have to have an advantage over the current therapy," Li said. "I don't know if a physician would trade the risk of pulmonary adversary risks for taking the drug from weekly to biweekly treatments."
Another analyst said the market overreacted to the news and that trials for the 900-mcg dose have been promising.
The analyst, William Sargent of Banc of America, said Human Genome Sciences said the efficacy of its lower-dose treatments has been above 90 percent, which should be enough to file for regulatory approval.