HGS Stock Up 277% On Lupus Results

Shares of Human Genome Sciences soared Monday on news that the firm's experimental lupus drug showed promise in its latest round of testing.

The Rockville-based firm's stock quickly jumped past $10 and closed at $12.51, up $9.19, or 277 percent. Some analysts have predicted that the company's stock could pass $15 if the drug is approved.

The HGS drug, called Benlysta, must undergo one more major round of testing before the company makes a formal application to the Food and Drug Administration. The biotech firm has partnered with pharmaceutical giant GlaxoSmithKline to market the drug and split any profits.

Sandra Raymond, chief executive of the Lupus Foundation of America, said it has been more than 50 years since a drug has been approved for treating the autoimmune disease; in the last year, three experimental drugs have posted disappointing test results.

"There was a pall setting in, and I think that's been lifted," she said. "It's a historic day for us, there's no getting away from that."

Raymond said her organization's Web site almost crashed as a result of a sudden surge of traffic after HGS's announcement Monday morning.

"People want to know when they can get the drug," she said. "We're being inundated on Facebook and Twitter."

Already, some critics of HGS say they may soon have reason to change their opinion of the company. John T. McCamant, editor of the Medical Technology Stock Letter, said he has been a skeptic for years with regards to HGS's outlook.

"They have done very little right, historically," he said. "They spent oodles of cash and delivered very little to the market."

But the latest results are enough for him to reconsider. "They're starting to look like they know what they're doing here," he said.

In the latest round of testing, 865 patient in 13 foreign countries were given different doses of the drug -- or a placebo -- for one year. Fifty-eight percent of those given a high dose saw improvement, compared with 44 percent given the placebo.

The results are a boost for HGS. Without the prospect of a potential success like Benlysta on its books, some wondered how the company would survive, especially considering it has more than $300 million in debt coming due in 2012.

HGS is slated to get the results of its final Phase 3 test for Benlysta in November. That test will include patients in different geographic regions -- including the United States and Western Europe -- from those used in the most recent tests.

Lupus, largely diagnosed in young women, causes the immune system to attack organs such as the skin, kidneys, lungs and brain. Patients suffer from a variety of symptoms, including fatigue, rashes and renal disease.

Currently, there is no drug specifically for lupus. Doctors typically treat patients with chemotherapy and steroids, which have shown decidedly mixed results in controlling lupus. The treatments often have nasty side effects: weight gain, bone loss and infections.

The injectable drug aims to reduce the activity of a protein that can become destructive in lupus patients. Benlysta has been in development for nearly a decade, initially under the name LymphoStat-B. It's chemical name is belimumab.

A physician who has participated in testing other experimental lupus treatments, Gary Gilkeson, said that the drug's apparent lack of significant side effects, judging from the latest test results, is an encouraging sign.