- First HGS product sales achieved with delivery of ABthrax(TM) to U.S.
Strategic National Stockpile -
- $177 million in first quarter revenues; cash balance of $397 million as
of March 31, up $24 million from year-end 2008 -
- Positive results for second Phase 3 trial of Albuferon(R) in chronic
hepatitis C; global marketing applications planned in fall 2009 -
- Initiation of Syncria(R) Phase 3 program brings $9 million milestone
payment from GSK -
ROCKVILLE, Md., April 29 /PRNewswire-FirstCall/ -- Human Genome Sciences,
Inc. (Nasdaq: HGSI) today announced financial results for the quarter ended
March 31, 2009, and provided highlights of recent key developments.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080416/HGSLOGO )
"In the first quarter of 2009, we achieved our first product sales with
ABthrax, and both Albuferon and LymphoStat-B(R) continued to make excellent
progress toward commercialization," said H. Thomas Watkins, President and
Chief Executive Officer. "We reported positive results from the second of two
pivotal trials of Albuferon in chronic hepatitis C, and we plan global
marketing applications in fall 2009. We are on track to have the results of
our two Phase 3 trials of LymphoStat-B in July and November 2009. We also
received a $9 million milestone payment from GSK with the initiation of Phase
3 clinical development of Syncria in type 2 diabetes. In addition, we made
solid financial progress during the quarter, reducing our long-term debt and
strengthening our cash position."
FINANCIAL RESULTS
HGS reported that revenues for the quarter ended March 31, 2009 increased
to $177.3 million, compared with revenues of $12.3 million for the same period
in 2008. Revenues included $153.8 million recognized upon the sale and
delivery of ABthrax to the U.S. Strategic National Stockpile, $9.0 million
recognized from the Syncria agreement with GSK, $8.9 million recognized from
the Albuferon agreement with Novartis and $1.6 million recognized from the
LymphoStat-B agreement with GSK.
Net income for the quarter ended March 31, 2009 increased to $129.8
million ($0.85 diluted per share), compared with a net loss for the first
quarter of 2008 of $52.7 million ($0.39 per share). The net income for the
quarter was due primarily to revenue recognized from the delivery of ABthrax
under the Company's contract with the U.S. Government. HGS has previously
expensed substantially all of the research, development and manufacturing
costs related to meeting the terms of the contract.
Cash and investments increased by $24.0 million during the first quarter.
As of March 31, 2009, cash and investments totaled $396.9 million, of which
$329.3 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.
In February 2009, HGS repurchased $106.2 million principal amount of its
outstanding convertible debt at a cost of $50.0 million in cash. The
repurchase included $82.9 million principal amount of the Company's 2-1/4%
Convertible Subordinated Notes Due October 2011, and $23.3 million principal
amount of the Company's 2-1/4% Convertible Subordinated Notes Due August 2012.
"The first quarter of 2009 was clearly a very strong quarter for HGS from
a financial perspective," said Tim Barabe, Senior Vice President and Chief
Financial Officer, HGS. "Our revenues were up substantially and were driven
for the first time by product sales. We reduced our long-term debt by more
than 20 percent by capitalizing on an opportunity to repurchase $106 million
of our outstanding convertible notes at reasonable prices. Our cash position
was strengthened and continues to be sufficient to take us through the
availability of Phase 3 data, the filing of marketing applications and the
launch of our late-stage products."
HIGHLIGHTS OF RECENT PROGRESS
First HGS Product Sales Achieved with Delivery of ABthrax(TM) to U.S.
Strategic National Stockpile; $154 Million in Revenue Recognized in the First
Quarter
In the first quarter of 2009, HGS achieved its first product sales by
initiating the delivery of 20,000 doses of ABthrax (raxibacumab) to the U.S.
Strategic National Stockpile for emergency use in the treatment of inhalation
anthrax. The Company expects to complete delivery in the current quarter. HGS
recognized $153.8 million in ABthrax revenue in the first quarter, including
$127.8 million in product sales, and will recognize at least $8.0 million in
additional revenue from delivery in the second quarter of 2009.
Also under the contract, HGS plans to file a Biologics License Application
(BLA) with the FDA in the second quarter of 2009. The Company will receive an
additional $10 million from the U.S. Government upon FDA licensure of ABthrax.
ABthrax 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).
Positive Results Announced for Second of Two Phase 3 Trials of
Albuferon(R) in Chronic Hepatitis C; Late-Breaker Results of Both Phase 3
Trials Presented at EASL
In March 2009, HGS reported that Albuferon (albinterferon alfa-2b) met its
primary endpoint of non-inferiority to Pegasys (peginterferon alfa-2a) in
ACHIEVE 1, a Phase 3 clinical trial of Albuferon in treatment-naive patients
with genotype 1 chronic hepatitis C. As previously reported, Albuferon also
met its primary endpoint in ACHIEVE 2/3, which was conducted in
treatment-naive patients with genotypes 2 and 3 chronic hepatitis C.
The results of both trials were presented on April 25 in the late-breaker
session at the 44th annual meeting of the European Association for the Study
of the Liver (EASL) in Copenhagen. The Phase 3 data demonstrate that, with
half as many injections, in two pivotal Phase 3 trials, Albuferon achieved
efficacy comparable to Pegasys with a positive safety profile. The submission
of global marketing applications for Albuferon is planned in fall 2009,
following discussions with the FDA and other regulatory authorities.
Albuferon is being developed by HGS and Novartis under an exclusive worldwide
co-development and commercialization agreement entered into in June 2006.
LymphoStat-B(R) Phase 3 Results Expected in July and November 2009
HGS expects to report the first Phase 3 data for LymphoStat-B (belimumab)
in July 2009 from the BLISS-52 trial, with results from BLISS-76 anticipated
in November 2009. BLISS-52 and BLISS-76 are the largest clinical trials ever
conducted in lupus patients. LymphoStat-B is being developed by HGS and GSK
under a co-development and commercialization agreement entered into in August
2006.
$9 Million Milestone Payment Received from GSK Following Initiation of
Phase 3 Development of Syncria(R)
HGS received a $9.0 million milestone payment during the first quarter of
2009, following GSK's initiation of a Phase 3 clinical trial program to
evaluate Syncria (albiglutide) in the long-term treatment of type 2 diabetes
mellitus. Syncria was created by HGS using its proprietary albumin-fusion
technology, and licensed to GSK in 2004. HGS is entitled to fees and
milestone payments that could amount to as much as $183.0 million, including
$33.0 million received to date. HGS is also entitled to single-digit
royalties on worldwide sales if Syncria is commercialized.
HGS and Morphotek Agree to Collaborate on Discovery, Development and
Commercialization of Therapeutic Antibodies for Oncology and Immunology
In March 2009, HGS and Morphotek, Inc., a subsidiary of Eisai Corporation
of North America, entered into a collaboration to discover, develop and
commercialize therapeutic monoclonal antibodies in the fields of oncology and
immunology that specifically target antigens discovered by HGS. Morphotek
will be responsible for validating targets discovered through genomic research
provided by HGS, generating and developing all monoclonal antibody candidates
using proprietary Morphotek technologies, and conducting early preclinical
proof-of-concept studies. HGS and Morphotek will have the right to
participate in the development and commercialization of each antibody
candidate.
CONFERENCE CALL
HGS management will hold a conference call to discuss this announcement
today at 5 PM Eastern time. Investors may listen to the call by dialing
877-591-4959 or 719-325-4901, passcode 2810740, five to 10 minutes before the
start of the call. A replay of the conference call will be available within a
few hours after the call ends. Investors may listen to the replay by dialing
888-203-1112 or 719-457-0820, confirmation code 2810740. Today's conference
call also will be webcast and can be accessed at www.hgsi.com. Investors
interested in listening to the live webcast should log on before the
conference call begins to download any software required. Both the audio
replay and the archive of the conference call webcast will remain available
for several days.
ABOUT HUMAN GENOME SCIENCES
The mission of HGS is to apply great science and great medicine to bring
innovative drugs to patients with unmet medical needs. The HGS clinical
development pipeline includes novel drugs to treat hepatitis C, lupus,
inhalation anthrax and cancer.
The Company's primary focus is rapid progress toward the commercialization
of its two lead drugs, Albuferon(R) (albinterferon alfa-2b) for hepatitis C
and LymphoStat-B(R) (belimumab) for lupus. Albuferon has now completed Phase 3
development, and the filing of global marketing applications is expected in
fall 2009. Two Phase 3 clinical trials of LymphoStat-B are ongoing, with
results expected in July and November 2009.
In January 2009, HGS began delivery of 20,000 doses of ABthrax(TM)
(raxibacumab) to the U.S. Strategic National Stockpile for use in the event of
an emergency for the treatment of inhalation anthrax. The Company also has
several drugs in earlier stages of clinical development for the treatment of
cancer, led by the TRAIL receptor antibody HGS-ETR1 and a small-molecule
antagonist of IAP (inhibitor of apoptosis) proteins. In addition, HGS has
substantial financial rights to certain products in the GSK clinical pipeline
including darapladib, currently in Phase 3 development as a potential
treatment for coronary heart disease, and Syncria(R) (albiglutide), currently
in Phase 3 development as a potential treatment for type 2 diabetes.
For more information about HGS, please visit the Company's web site at
www.hgsi.com. Health professionals and patients interested in clinical trials
of HGS products may inquire via e-mail to clinical_trials@hgsi.com or by
calling HGS at (301) 610-5790, extension 3550.
HGS, Human Genome Sciences, ABthrax, Albuferon and LymphoStat-B are
trademarks of Human Genome Sciences, Inc.
SAFE HARBOR STATEMENT
This announcement contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. The forward-looking
statements are based on Human Genome Sciences' current intent, belief and
expectations. These statements are not guarantees of future performance and
are subject to certain risks and uncertainties that are difficult to predict.
Actual results may differ materially from these forward-looking statements
because of the Company's unproven business model, its dependence on new
technologies, the uncertainty and timing of clinical trials, the Company's
ability to develop and commercialize products, its dependence on collaborators
for services and revenue, its substantial indebtedness and lease obligations,
its changing requirements and costs associated with facilities, intense
competition, the uncertainty of patent and intellectual property protection,
the Company's dependence on key management and key suppliers, the uncertainty
of regulation of products, the impact of future alliances or transactions and
other risks described in the Company's filings with the Securities and
Exchange Commission. In addition, while the Company has begun shipment of
ABthrax to the U.S. Strategic National Stockpile, the Company will continue to
face risks related to acceptance of future shipments and FDA's approval of the
Company's Biologics License Application for ABthrax, if and when it is
submitted. If the Company is unable to meet requirements associated with the
ABthrax contract, future revenues from the sale of ABthrax to the U.S.
Government will not occur. Existing and prospective investors are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of today's date. Human Genome Sciences undertakes no obligation to
update or revise the information contained in this announcement whether as a
result of new information, future events or circumstances or otherwise.
(See selected financial data on following pages.)
HUMAN GENOME SCIENCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
2009 2008
(dollars in thousands, except share
and per share amounts)
Revenue:
Product sales $127,769 $-
Manufacturing and development services 29,116 -
Research and development collaborative
agreements 20,392 12,275
Total revenue 177,277 12,275
Costs and expenses:
Cost of product sales 8,177 -
Cost of manufacturing and development
services 3,351 -
Research and development expenses 53,675 72,691
General and administrative expenses 14,279 16,011
Total costs and expenses (a) 79,482 88,702
Income (loss) from operations 97,795 (76,427)
Investment income 4,296 6,707
Interest expense (15,730) (15,517)
Gain on extinguishment of debt 38,873 -
Gain on sale of long-term equity investment 5,259 32,518
Other expense (680) -
Income (loss) before taxes 129,813 (52,719)
Provision for income taxes - -
Net income (loss)(b) $129,813 $(52,719)
Basic net income (loss) per share $0.96 $(0.39)
Diluted net income (loss) per share $0.85 $(0.39)
Weighted average shares outstanding,
basic 135,755,471 135,284,778
Weighted average shares outstanding,
diluted 163,423,487 135,284,778
(a) Includes stock-based compensation expense of $2,935 ($0.02 per
basic and diluted share) and $4,463 ($0.03 per basic and diluted
share) for the three months ended March 31, 2009 and 2008,
respectively.
(b) HGS adopted FASB Staff Position No. APB 14-1, Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement) ("FSP APB 14-1")
effective January 1, 2009, which required restatement of prior
periods, as applicable. Includes amortization of debt discount of
$6,398 ($0.05 per basic share and $0.04 per diluted share) for the
three months ended March 31, 2009. 2008 results have been
restated and now include amortization of debt discount of $5,854
($0.04 per basic and diluted share) for the three months ended March
31, 2008. Results for 2009 and 2008 also include certain other
immaterial adjustments arising from the adoption of FSP APB 14-1.
CONSOLIDATED BALANCE SHEET DATA:
As of As of
March 31, 2009 December 31, 2008(c)
(dollars in thousands)
Cash, cash equivalents and
investments (d) $396,852 $372,939
Total assets (d) 735,365 686,832
Convertible subordinated debt (e) 334,269 417,597
Lease financing 247,061 246,477
Total stockholders' deficit (3,448) (136,304)
(c) As noted in footnote (b) above, FSP APB 14-1 required restatement of
prior periods. Total assets, convertible subordinated debt, and
total stockholders' deficit as previously reported were $674,164,
$510,000, and $(241,375), respectively, as of December 31, 2008.
(d) Includes $67,569 and $69,360 in restricted investments at March 31,
2009 and December 31, 2008, respectively.
(e) Convertible subordinated debt is net of unamortized debt discount of
$69,581 and $92,403 as of March 31, 2009 and December 31, 2008,
respectively. Convertible subordinated debt at face value is
$403,850 and $510,000 as of March 31, 2009 and December 31, 2008,
respectively.
SOURCE Human Genome Sciences, Inc.
-0- 04/29/2009
/CONTACT: Media, Jerry Parrott, Vice President, Corporate Communications,
+1-301-315-2777, or Investors, Peter Vozzo, Senior Director, Investor
Relations, +1-301-251-6003, both of Human Genome Sciences, Inc./
/Photo: http://www.newscom.com/cgi-bin/prnh/20080416/HGSLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk photodesk@prnewswire.com/
/Web Site: http://www.hgsi.com/ /
(HGSI)
CO: Human Genome Sciences, Inc.
ST: Maryland
IN: MTC BIO HEA
SU: ERN CCA
PR
-- PH07637 --
1437 04/29/2009 16:05 EDT http://www.prnewswire.com
