Human Genome Sciences, Inc. (Nasdaq:HGSI) today announced financial results for the quarter ended September 30, 2009, and provided highlights of recent key developments.
“In the third quarter, we made outstanding progress on the path to commercialization of our late-stage products and substantially improved our financial strength,” said H. Thomas Watkins, President and Chief Executive Officer. “The positive Phase 3 results we have seen for both BENLYSTA for systemic lupus and ZALBIN for chronic hepatitis C suggest that each of these products represents a significant therapeutic and commercial opportunity. Assuming the second Phase 3 trial of BENLYSTA is successful, we believe it could become the first new drug approved for lupus in more than 50 years.”
FINANCIAL RESULTS
HGS reported that revenues for the quarter ended September 30, 2009, increased to $18.8 million, compared with revenues of $11.7 million for the same period in 2008. Revenues included $8.7 million from manufacturing and development services, $8.9 million recognized from the ZALBIN agreement with Novartis, and $1.0 million recognized from the BENLYSTA agreement with GSK.
Net loss for the quarter ended September 30, 2009, decreased to $49.0 million ($0.32 per share), compared with a net loss for the third quarter of 2008 of $74.2 million ($0.55 per share). The lower net loss for the quarter was due primarily to higher revenues from manufacturing and development services and lower research and development and general and administrative expenses.
For the first nine months of 2009, HGS reported revenues of $222.8 million, compared with revenues of $35.5 million for the same period of the previous year. Revenues included $162.4 million recognized upon the sale and delivery of raxibacumab to the U.S. Strategic National Stockpile in the first and second quarters of 2009, $18.7 million from manufacturing and development services other than raxibacumab, $26.6 million recognized from the ZALBIN agreement with Novartis, a $9.0 million milestone recognized from the Syncria® agreement with GSK in the first quarter of 2009, and $3.7 million recognized from the BENLYSTA agreement with GSK.
The Company reported net income of $15.4 million ($0.11 per share) for the nine months ended September 30, 2009, compared with a net loss of $207.0 million ($1.53 per share) for the same period of the previous year. The net income for the nine months was due primarily to revenue from the sale and delivery of raxibacumab, revenue from manufacturing and development services, a gain on extinguishment of debt, and lower research and development and general and administrative expenses.
Cash increased by $326.3 million during the third quarter as a result of the successful public offering of common stock completed in August 2009. As of September 30, 2009, cash and investments totaled $697.2 million, of which $627.6 million was unrestricted and available for operations. This compares with cash and investments totaling $372.9 million as of the end of December 31, 2008, of which $303.6 million was unrestricted and available for operations.
“From a financial perspective, the third quarter of 2009 was another strong quarter for HGS,” said Tim Barabe, Senior Vice President and Chief Financial Officer. “We were particularly pleased by the market’s strong response to our public offering of common stock. With the proceeds from the offering, our cash position is even stronger and is now more than sufficient to take us through the filing of marketing applications and the launch of our late-stage products, while also enabling continued investment in our earlier-stage pipeline.”
HIGHLIGHTS OF RECENT PROGRESS
BENLYSTA™ Becomes First Lupus Drug to Achieve Positive Results in a Phase 3 Trial; Full Presentation of BLISS-52 Results at ACR Annual Scientific Meeting; Topline Results of BLISS-76 Expected November 2nd
In July 2009, HGS and GSK announced that BENLYSTA (belimumab) met the primary efficacy endpoint of superiority versus placebo at Week 52 in BLISS-52, the first of two pivotal Phase 3 trials in seropositive patients with systemic lupus erythematosus (SLE) – thus becoming the first drug for lupus to achieve positive results in a Phase 3 trial.
On October 20, 2009, HGS provided a full presentation of BLISS-52 results at the late-breaker session of the 73rd Annual Scientific Meeting of the American College of Rheumatology (ACR) in Philadelphia. The data showed that BENLYSTA plus standard of care achieved a clinically and statistically significant improvement in patient response rate as measured by the SLE Responder Index at Week 52, compared with placebo plus standard of care. In BLISS-52, BENLYSTA significantly reduced SLE disease activity, disease flare rates and fatigue; significantly delayed time-to-first SLE disease flare; reduced prednisone use and improved health-related patient quality of life. Study results also showed that belimumab was generally well tolerated, with adverse event rates comparable between belimumab and placebo treatment groups.
In September 2009, an article in the peer-reviewed journal, Arthritis Care & Research, described the development and use of the SLE Responder Index selected as the primary endpoint of both pivotal Phase 3 trials of BENLYSTA as a potentially significant advance in lupus drug development. This primary endpoint was accepted by the FDA under a Special Protocol Assessment for the Phase 3 trials.