Jul 23 2010
Human Genome Sciences, Inc. (Nasdaq:HGSI) today announced financial results for the quarter ended June 30, 2010, and provided highlights of recent key developments.
“HGS continues to invest in the materials and infrastructure required to support the commercial launch of BENLYSTA”
"BENLYSTA continued to make excellent progress toward commercialization in the second quarter of 2010," said H. Thomas Watkins, President and Chief Executive Officer. "We and GlaxoSmithKline have submitted regulatory applications seeking approval to market BENLYSTA in the United States, Europe and Canada, and we expect to submit applications in other countries in the coming months. We have the potential, if FDA grants priority review, to receive approval of BENLYSTA in the United States before the end of 2010. The results of our BLISS-76 Phase 3 trial were presented in June at the 2010 EULAR meeting in Rome, and additional results from our BLISS-52 and BLISS-76 studies were presented at EULAR and at the International Congress on SLE in Vancouver. These results provided additional support for our belief that BENLYSTA could become the first new approved drug for lupus in more than 50 years."
FINANCIAL RESULTS
HGS reported revenues for the quarter ended June 30, 2010 of $38.8 million, compared with revenues of $26.7 million for the same period in 2009. Revenues primarily included $19.1 million recognized from payments previously received under the ZALBIN™ agreement with Novartis, $13.1 million recognized from sales and deliveries of raxibacumab to the U.S. Strategic National Stockpile, and $4.8 million from manufacturing and development services other than raxibacumab and BENLYSTA.
The Company reported a reduced net loss for the second quarter of 2010 of $56.9 million ($0.30 per share), compared with a net loss of $65.4 million ($0.48 per share) for the second quarter of 2009.
For the first six months of 2010, HGS reported revenues of $85.3 million, compared with revenues of $204.0 million for the same period of the previous year. Revenues primarily included $46.7 million recognized from the ZALBIN agreement with Novartis, $26.7 million recognized from the sale and delivery of raxibacumab to the U.S. Strategic National Stockpile, and $8.7 million from manufacturing and development services other than raxibacumab and BENLYSTA. The reduction in revenues for the current six months, compared with the same period last year, primarily reflected the higher level of raxibacumab revenue, $162.7 million, recognized in 2009.
The Company reported a net loss of $104.7 million ($0.56 per share) for the six months ended June 30, 2010, compared with net income of $64.4 million ($0.47 per share) for the same period of the previous year. The net loss for the current six months, compared with the same period last year, primarily reflected the difference described above in raxibacumab revenue recognized in 2010 versus the same period in 2009, in addition to a gain in 2009 of $38.9 million on the extinguishment of debt.
As of June 30, 2010, cash and investments totaled $1.07 billion, of which $981.8 million was unrestricted and available for operations. This compares with cash and investments totaling $1.2 billion as of December 31, 2009, of which $1.1 billion was unrestricted and available for operations.
"HGS continues to invest in the materials and infrastructure required to support the commercial launch of BENLYSTA," said David P. Southwell, Executive Vice President and Chief Financial Officer. "We have a strong cash position that allows us to invest strategically in building a fully commercial organization, product inventory for launch, and the development of our product pipeline."
HIGHLIGHTS OF RECENT PROGRESS
BENLYSTA®: Regulatory Applications Submitted Seeking Approval to Market in the United States, Europe and Canada; BLISS-76 Results and Additional Phase 3 Data Presented at Scientific Meetings; Agreement with Lonza for Future Commercial Supply
In June 2010, GlaxoSmithKline (GSK) submitted a Marketing Authorization Application to the European Medicines Agency, seeking approval to market BENLYSTA (belimumab) in Europe for treatment of seropositive patients with SLE, and HGS submitted a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) seeking approval to market BENLYSTA for the same indication in the United States. No new drug for lupus has been approved by regulatory authorities in more than 50 years.
The results of BLISS-76, one of two pivotal Phase 3 trials of BENLYSTA, were presented in June at the 2010 Congress of the European League Against Rheumatism (EULAR) in Rome. Additional results from the BLISS-76 study were presented later in June at the 9th International Congress on SLE in Vancouver. Further analyses of the BLISS-52 Phase 3 study were presented at both of these scientific meetings. As previously reported, BENLYSTA met the primary efficacy endpoint in both Phase 3 trials. The efficacy of treatment with BENLYSTA plus standard of care was superior to placebo plus standard of care in both BLISS-52 and BLISS-76, with overall adverse event rates comparable to placebo plus standard of care.
On July 13, 2010, HGS and Lonza announced an agreement for future commercial supply of BENLYSTA. HGS believes that its large-scale manufacturing facility has ample capacity to provide worldwide supply of BENLYSTA following approval and for the first two or three years following launch. However, HGS also believes that additional capacity will eventually be required. Lonza, a leader in biologics manufacturing with a global network of large-scale production sites, was selected after a careful review of proposals from a number of highly qualified commercial manufacturing organizations.
BENLYSTA is being developed by HGS and GSK under a co-development and commercialization agreement entered into in 2006.
Raxibacumab: $13.1 Million in Revenue Recognized from Deliveries to the U.S. Strategic National Stockpile
In the second quarter of 2010, HGS recognized $13.1 million in revenue from the delivery of 4,149 doses of raxibacumab to the U.S. Strategic National Stockpile. The delivery was made under a purchase order received from the U.S. Government in July 2009 for 45,000 doses of raxibacumab to be delivered over a three-year period. HGS expects to receive approximately $142.0 million from the second award as deliveries are completed, including $44.4 million recognized to date. Raxibacumab is being developed under a contract entered into in 2006 with the Biomedical Advanced Research and Development Authority (BARDA) of the Office of the Assistant Secretary for Preparedness and Response (ASPR), U.S. Department of Health and Human Services (HHS).
ZALBIN™: Preliminary Feedback Received from FDA on BLA; MAA Withdrawn in Europe
HGS received preliminary written feedback from the FDA regarding the Company's Biologics License Application seeking approval to market 900-mcg ZALBIN dosed every two weeks for the treatment of chronic hepatitis C. Although the BLA review is ongoing, HGS has concluded that licensure of this dosing regimen is unlikely, as previously reported. In April 2010, HGS announced that Novartis withdrew its Marketing Authorization Application for JOULFERON®, as ZALBIN is known outside the United States, from the European Medicines Agency. HGS and Novartis are considering development of ZALBIN dosed every four weeks. ZALBIN is being developed by HGS and Novartis under an exclusive worldwide co-development and commercialization agreement entered into in 2006.
Oncology Program
In June 2010, HGS announced that the results of a randomized Phase 2 trial of mapatumumab in combination with bortezomib (Velcade) in patients with advanced multiple myeloma showed no difference in disease response or progression-free survival for the combination that included mapatumumab vs. the control group receiving bortezomib alone. Mapatumumab was well tolerated in the study. HGS expects to present the results in full at an appropriate scientific meeting later in 2010. A Phase 2 trial is currently underway to evaluate mapatumumab's potential, in combination with Nexavar (sorafenib), in the treatment of advanced hepatocellular cancer.
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