Tuesday, November 16, 2010

Human Genome Sciences

Update Today : Lupus Drug FDA Approves Human Genome Drug (HGSI)
Human Genome Sciences Inc. has drugs in its pipeline that include novel drugs to treat hepatitis C, lupus, inhalation anthrax, and cancer.

In October the companies drug Zalbin (albinterferon alfa-2b, known in Europe as Joulferon) for the treatment of chronic hepatitis C, decided not to continue the development of the drug: Human Genome Sciences Receives Complete Response Letter from FDA on Zalbin BLA for Chronic Hepatitis C

Recapturing the magic at Human Genome Sciences
By Toni Clarke

BOSTON Fri Nov 5, 2010 1:43pm EDT

BOSTON (Reuters) - In early 2009, the board of directors of Human Genome Sciences Inc (HGSI.O) met in the conference room at the company's headquarters in Rockville, Maryland. A pall hung over the room. The debt-ridden company, which had, in its heyday, been one the highest-flying stocks in the biotech sector, was close to insolvency.

Its only hope for recovery lay in the pending release of data from a late-stage clinical trial of Benlysta, its experimental drug for Lupus, a complex disorder for which no new therapy had been developed in half a century. Earlier data from a smaller trial had been mixed, and investors, for the most part, had written the drug off.

"We all realized that our whole story hinged on the Benlysta data," said Augustine Lawlor, a board member and managing partner at HealthCare Ventures LLC, a venture capital company. "We were all very quiet. We knew that if we didn't have great data from Benlysta we were done as a company."

Over sandwiches, the board listened as Thomas Watkins, the company's chief executive officer; David Stump, its vice president of research and development; and William Freimuth, head of clinical research into immunology and infectious diseases, reviewed the clinical protocol for Benlysta, and the data they had used to determine their strategy.

"I remember very distinctly going home after that board meeting and thinking, "These guys, I think they're going to do it," Lawlor said.

Less than six months later the drug met the main goal of a late-stage clinical trial known as BLISS-52, sending Human Genome Sciences shares soaring more than 340 percent in the days following and breathing new life into a company that had spent nearly a decade in the wilderness.

"This was the defining moment for the company," said David Southwell, its chief financial officer. Within two weeks, the company had raised $367 million through a sale of new stock.

Now Human Genome Sciences is holding its collective breath again as it waits to hear whether the U.S. Food and Drug Administration will approve the product. On November 12, FDA staff will release documents that will help inform a discussion to be held on November 16 by a panel of FDA advisers. The agency is expected to make its decision by the end of the year.

If the drug is approved, some analysts estimate it could generate annual sales of more than $3 billion, placing the company into the biotech big leagues and challenging CEO Watkins with the task of shaping a new identity for the company while retaining the positive elements of its heritage.


In June, 2000, at a White House ceremony, Bill Clinton, the President of the United States and Tony Blair, Britain's Prime Minister, joined to announce the completion of the first survey of the human genome - the genetic blueprint of human beings - a feat that would, they said, lead to new ways to prevent, diagnose and treat disease.

"Without a doubt, this is the most important, most wondrous map ever produced by humankind," Clinton said. "Today, we are learning the language in which God created life. We are gaining ever more awe for the complexity, the beauty, the wonder of God's most divine and sacred gift."

The event was emblematic of the frenetic interest in genomics; and Human Genome Sciences, whose mission was to isolate genes and identify their function in order to develop new drugs, was the leading beneficiary of what was, in retrospect, a biotech bubble.

In February that year, the company's shares, currently trading at around $26, were trading at more than $115, even though it did not have a single drug on the market. Its flamboyant founder and chief executive, William Haseltine, was making bold predictions that the company's technology would speed the drug discovery process by years, and venture capitalists were falling over themselves to invest.

"Human Genome was the poster child for the genomic bubble," said Kris Jenner, a portfolio manager at T.Rowe Price Healthcare Sciences Fund, one of the company's biggest and longest-standing shareholders. "That was the go-go period where every six to nine months the company was raising more money."

Between 1992, when the company was formed, and 2000, Human Genome Sciences had raised more than $2 billion in the public markets. In 1993 it entered into one of the biggest deals the sector had seen - a $125 million partnership with SmithKline Beecham, now GlaxoSmithKline Plc (GSK.L).

"I knew what the public markets in biotech were like," Haseltine said. "I knew this was an exceptionally good time for fundraising."

But the fruits of the genomics revolution have been slow to materialize, and several of the company's drugs failed in clinical trials. By March, 2009, amid skepticism Benlysta would succeed, the company's stock dipped below 50 cents a share.

"At one time we gave out turkeys at Christmas," said Haseltine, who retired as CEO in 2004. "Then everyone wanted stock -- but by the time I left they said, 'Please give us the turkey!' I think that sums it up."

In many ways, the path traced by Human Genome Sciences is typical of biotechnology companies founded by scientific visionaries. At a certain point, the vision must turn into business. And rarely are the scientists successful long-term CEOs.

Haseltine, a former Harvard professor and leading AIDS researcher, by his own admission had little interest in the day-to-day operations of the business, and by 2004 it was clear to the board, and to Haseltine himself, that a change in leadership was needed.

"It was time for me to go as part of the creative destruction process," Haseltine said. "I really understood the science, but had no understanding, or even interest in, late stage development or marketing."


The person on whom the mantel fell was Watkins, a nearly 20-year veteran of Abbott Laboratories (ABT.N), a diversified healthcare company well known for turning out skilled business leaders.

Watkins, 57, is the antithesis of Haseltine. Where Haseltine, a mercurial scientist, captured headlines with his bold vision of the future, his ability equally to charm and enrage, and his ethereal management style, Watkins is a low-key strategic thinker who keeps his emotions in check.

"Tom does not have extremely big emotional highs and lows," said Jerry Karabelas, the company's chairman. "He's very, very steady, which makes him a very strong manager, particularly in a biotech company where every day there is an up and a down. If you get too excited about the highs you'll get too depressed about the lows."

While Haseltine was a jet-setter who married Gale Hayman, creator of Giorgio perfume, Watkins, an only child who grew up in Cleveland, Ohio, lives quietly with his wife and three children.

Watkins, whose father, Hays Thomas Watkins, was formerly the chief executive of CSX Corp, the railroad company, graduated from the College of William and Mary and the University of Chicago, and went on to work at accounting firm Arthur Andersen & Co and McKinsey and Co, a management consultancy. He joined Abbott in 1985, where he served in multiple managerial capacities before joining Human Genome Sciences.

"Tom came into HGSI at a time when the company desperately needed discipline, focus and a leader who has very strong operational strengths, and he has all those things," said Jenner.

Watkins streamlined the company and focused it on a core group of products, most prominently Benlysta, and he took command of every detail of the company's operations.

"If I get a rumor from Wall Street that the short interest is up, or hedge funds are selling, he always wants it," said CFO Southwell. "He is a magnet for information, but at the same time he solicits a lot of advice."
Now Watkins has the job, potentially, of managing success -- of maximizing the value of Benlysta, which if approved could be on the market early next year, and harnessing the potential of the company's portfolio of genes in a way that could turn Haseltine's vision into a viable business.

"We are starting to pull off the shelf some exciting targets that the company discovered in the 1990s and which we believe have promise," he said. "We're doing animal work with the objective of putting a number into clinical trials over the next few years."

Watkins has a clear idea of where he wants his company to be in five years, and in 25 years.

"I regard Genentech as the premiere company from the standpoint of what they have created," he said, referring to the maker of cancer drugs such as Herceptin and Avastin. "I'd like for us to mean to the industry in 25 years what Genentech has meant to it over the last 25 years."

(Reporting by Toni Clarke; Editing by Tim Dobbyn)


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