Technically,
Human Genome Sciences (Nasdaq: HGSI) has one
drug for sale, but it's between shipments of ABthrax, its
anthrax treatment, to the government, so Human Genome's
earnings release Thursday was rather dry.
The company recorded a measly $18.8 million in revenue
from partnerships with
GlaxoSmithKline (NYSE: GSK) and
Novartis (NYSE: NVS) and lost a lot of money,
though less than last year. You get the picture.
But don't let the nature of the (mostly) drugless biotech
lull you to sleep. Like a good horror flick, there's
something lurking in the woods, and it's going to send the
stock moving in one direction or the other on the other side
of Halloween.
On Monday, we'll get to hear the results from the second
phase 3 trial of Benlysta in systemic lupus erythematosus
(SLE) patients. The suspense has been growing since Human
Genome and its partner Glaxo announced the release date a few
weeks ago. It's rare that investors get more than an
overnight warning of the release of phase 3 trial results.
Usually companies want to get them out as soon as the data is
compiled.
Just a few months ago, no one gave the drug much chance of
working, but the first phase 3 trial was
positiveand the stock is up more than 500% since then.
That success should give investors confidence that the second
trial will work, but it doesn't guarantee success, as
InterMune 's (Nasdaq: ITMN)
50% success ratein phase 3 trials shows.
The risk of failure is also increased because Benlysta
treats lupus -- the place where
good drugs go to die.
Biogen Idec (Nasdaq: BIIB),
Teva Pharmaceutical (Nasdaq: TEVA), and
BioMarin Pharmaceuticals (Nasdaq: BMRN) all
have drugs in the lupus graveyard, and a new drug hasn't been
approved specifically to treat it in decades.
The way I see it, there's less upside potential than
downside risk at this point, and I'll take a pass and watch
from the sidelines while munching on leftover Halloween candy
Monday morning.
Got a different take? Let us know in the comments box
below.
This article was originally published as
Earnings? Yawn. Trial Data? Moving!on
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