- New order for 45,000 doses of raxibacumab to bring $151 million in revenue
over next three years -
- BENLYSTA(TM) meets primary endpoint in first of two Phase 3 trials by
achieving a statistically significant improvement in patient response rate
versus placebo -
ROCKVILLE, Md., July 22 /PRNewswire-FirstCall/ -- Human Genome Sciences,
Inc. (Nasdaq: HGSI) today announced financial results for the quarter ended
June 30, 2009, and provided highlights of recent key developments.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080416/HGSLOGO )
"Both BENLYSTA(TM) and ZALBIN(TM) (formerly Albuferon ) continued to make
excellent progress toward commercialization in the second quarter of 2009,"
said H. Thomas Watkins, President and Chief Executive Officer. "Results of
the first of two pivotal Phase 3 trials of BENLYSTA demonstrated that BENLYSTA
has the potential to become the first new approved drug in decades for people
living with systemic lupus. We and GlaxoSmithKline are on track to have data
from our second Phase 3 trial of BENLYSTA in November 2009. We and Novartis
have completed our pre-submission meetings with the FDA and European
regulatory agencies, and are on track for submission of global marketing
applications for ZALBIN in fall 2009. We also received our second order from
the U.S. Government for raxibacumab, and expect $151 million from this award
over the next three years as deliveries are completed."
FINANCIAL RESULTS
HGS reported that revenues for the quarter ended June 30, 2009, increased
to $26.7 million, compared with revenues of $11.6 million for the same period
in 2008. Revenues included $8.9 million recognized upon completion of
delivery of raxibacumab (ABthrax(TM)) to the U.S. Strategic National
Stockpile, $8.9 million recognized from the ZALBIN agreement with Novartis,
$7.2 million recognized from manufacturing and development services, and $1.0
million recognized from the BENLYSTA agreement with GSK.
Net loss for the quarter ended June 30, 2009, decreased to $65.4 million
($0.48 per share), compared with a net loss for the second quarter of 2008 of
$80.1 million ($0.59 per share). The lower net loss for the quarter was due
primarily to revenue associated with the completion of the raxibacumab
delivery and revenue from manufacturing and development services. HGS has
previously expensed substantially all of the research, development and
manufacturing costs related to meeting the terms of the raxibacumab contract.
For the first six months of 2009, HGS reported revenues of $204.0 million,
compared with revenues of $23.8 million for the same period of the previous
year. Revenues included $162.7 million from the Company's raxibacumab
contract with the U.S. Government, $17.7 million from the ZALBIN agreement,
$10.3 million from manufacturing and development services, and $2.7 million
from the BENLYSTA agreement.
The Company reported net income of $64.4 million ($0.47 per share) for the
six months ended June 30, 2009, compared with a net loss of $132.8 million
($0.98 per share) for the same period of the previous year. The net income
for the six months was due primarily to revenue from the sale and delivery of
raxibacumab, revenue from manufacturing and development services, and lower
research and development and general and administrative expenses.
Cash decreased by $2.0 million during the first six months of 2009. As of
June 30, 2009, cash and investments totaled $370.9 million, of which $301.6
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.
"The second quarter of 2009 saw substantial progress," said Tim Barabe,
Senior Vice President and Chief Financial Officer. "Revenues increased
substantially over the same quarter of 2008. Our cash position remains
strong, 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
New Order Received from U.S. Government for Raxibacumab; $151 Million in
Revenue Expected over Three-Year Period; Raxibacumab BLA to Receive Priority
FDA Review; Data Supporting BLA Published in New England Journal of Medicine
In a separate press release issued earlier today, HGS announced that the
U.S. Government has exercised its option to purchase an additional 45,000
doses of raxibacumab for the Strategic National Stockpile, to be delivered
over a three-year period, beginning near the end of 2009. HGS expects to
receive approximately $151 million from this award as deliveries are
completed.
Raxibacumab is a first-in-class treatment for anthrax, and 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).
In May 2009, HGS submitted a Biologics License Application (BLA) to the
FDA for raxibacumab for the treatment of inhalation anthrax. In July 2009,
the FDA notified HGS that the BLA for raxibacumab has been filed and will
receive priority review. The Company will receive $10 million under the BARDA
contract upon FDA licensure of raxibacumab.
The July 9, 2009 edition of The New England Journal of Medicine published
the results of two pivotal animal efficacy studies, which showed the
life-saving potential of raxibacumab, as well as the results of human safety
studies, which supported the use of raxibacumab in the event of
life-threatening inhalation anthrax disease. The data published by the New
England Journal were submitted to the FDA in support of the raxibacumab BLA.
BENLYSTA Met Primary Endpoint in First Phase 3 Trial; Data Showed
Clinically and Statistically Significant Improvement versus Placebo; First
Drug for Lupus to Complete a Phase 3 Trial with Positive Results
On July 20, 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 patients with
serologically positive systemic lupus erythematosus (SLE). The results showed
that BENLYSTA plus standard of care achieved a statistically significant
improvement in patient response rate at Week 52, compared with standard of
care alone. Study results also showed that BENLYSTA was generally well
tolerated, with adverse event rates comparable between belimumab and placebo
treatment groups. HGS plans a full presentation of BLISS-52 results at an
appropriate scientific meeting later in 2009, and is on track to have results
from BLISS-76, the second Phase 3 trial in SLE, in November 2009.
BENLYSTA is the first in a new class of drugs called BLyS-specific
inhibitors. No new drug for lupus has been approved by regulatory authorities
in more than 50 years. BENLYSTA is being developed by HGS and GSK under a
co-development and commercialization agreement entered into in August 2006.
In June 2009, results through four years of the long-term Phase 2
continuation study of BENLYSTA were presented at the Congress of the European
League against Rheumatism (EULAR). The data showed that BENLYSTA was
associated with sustained improvement in SLE disease activity and patient
response rates, decreased frequency of disease flares and was generally well
tolerated through four years on treatment in combination with standard of care
in serologically active patients with SLE.
ZALBIN(TM) Selected as Albinterferon Alfa-2b Brand Name in the United
States; Pre-Submission Meetings with Regulatory Authorities Completed - on
Track for Fall Submission of Global Marketing Applications; Positive Phase 3
Results in Chronic Hepatitis C Presented at EASL
HGS and Novartis have selected ZALBIN as the brand name for
albinterferon-alfa 2b (formerly Albuferon) in the United States. Joulferon
has been selected as the brand name in the rest of the world. These brand
names will be subject to confirmation by health authorities at the time of
product approval. The companies have also completed pre-submission meetings
with the FDA and European regulatory agencies, and are on track for submission
of global marketing authorization applications for ZALBIN (Joulferon) in fall
2009.
In April 2009, positive Phase 3 results of ZALBIN in patients with chronic
hepatitis C were presented at the 44th annual meeting of the European
Association for the Study of the Liver in Copenhagen. Data from two pivotal
Phase 3 trials, ACHIEVE 1 and ACHIEVE 2/3, showed that ZALBIN met its primary
endpoint of non-inferiority to Pegasys (peginterferon alfa-2a). With half the
injections, ZALBIN achieved a rate of sustained virologic response comparable
to Pegasys in these studies, with rates of serious and/or severe adverse
events that also were comparable. ZALBIN is being developed by HGS and
Novartis under an exclusive worldwide co-development and commercialization
agreement entered into in June 2006.
Syncria Phase 2 Data Show Significant Reduction in Blood Glucose Levels
and Provided Weight Loss in Type 2 Diabetes Patients
In June 2009, GSK announced that new Phase 2 data presented at the
American Diabetes Association's 69th Scientific Sessions in New Orleans showed
that Syncria (albiglutide) significantly reduced blood glucose levels and
provided weight loss across weekly, biweekly and monthly dosing. Reducing
blood sugar is a key part of managing type 2 diabetes, a disease that affects
over 250 million people worldwide. GSK has initiated a Phase 3 development
program for Syncria, involving multiple clinical trials, to evaluate its
efficacy, safety and tolerability in the long-term treatment of type 2
diabetes mellitus.
Syncria is a biological product generated from the genetic fusion of human
albumin and modified human GLP-1 peptide, and is designed to act throughout
the body to help maintain normal blood-sugar levels and to control appetite.
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 million - including $33.0 million
received to date - in addition to single-digit royalties on worldwide sales if
Syncria is commercialized.
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, BENLYSTA(TM) (belimumab) for lupus and ZALBIN(TM)
(albinterferon alfa-2b, formerly Albuferon ) for hepatitis C. BENLYSTA has
successfully met its primary endpoint in the first of two Phase 3 trials in
systemic lupus erythematosus, and results of the second BENLYSTA Phase 3 trial
are expected in November 2009. ZALBIN has now completed Phase 3 development,
and the submission of global marketing applications is expected in fall 2009.
In May 2009, HGS submitted a Biologics License Application to the FDA for
raxibacumab (ABthrax(TM)) for the treatment of inhalation anthrax. In July
2009, the Company secured a new purchase order for 45,000 doses of raxibacumab
to be delivered to the U.S. Strategic National Stockpile over a three-year
period, beginning near the end of 2009. 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 in patients with coronary heart disease, and
Syncria (albiglutide), currently in Phase 3 development in patients with 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 medinfo@hgsi.com or by calling HGS
at (877) 822-8472.
HGS, Human Genome Sciences, ABthrax, Albuferon, BENLYSTA, and ZALBIN 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 completed shipment of
the initial order of raxibacumab to the U.S. Strategic National Stockpile, the
Company will continue to face risks related to FDA's approval of the Company's
Biologics License Application for raxibacumab. If the Company is unable to
meet requirements associated with the raxibacumab contract, future revenues
from the sale of raxibacumab 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 Six months ended
June 30, June 30,
2009 2008(a) 2009 2008(a)
----------- ----------- ----------- -----------
(dollars in thousands, except share and per share amounts)
Revenue:
Product sales $8,612 $- $136,381 $-
Manufacturing and
development services 7,510 - 36,626 -
Research and development
collaborative
agreements 10,559 11,567 30,951 23,842
----------- ----------- ----------- -----------
Total revenue 26,681 11,567 203,958 23,842
----------- ----------- ----------- -----------
Costs and expenses:
Cost of product sales 6,391 - 14,569 -
Cost of manufacturing
and development
services 6,558 - 9,909 -
Research and
development
expenses 42,910 67,592 96,586 140,283
General and
administrative
expenses 12,802 14,332 27,080 30,343
Facility-related
exit costs 11,434 - 11,434 -
----------- ----------- ----------- -----------
Total costs and
expenses (b) 80,095 81,924 159,578 170,626
----------- ----------- ----------- -----------
Income (loss) from
operations (53,414) (70,357) 44,380 (146,784)
Investment income 2,920 5,888 7,217 12,595
Interest expense (13,819) (15,638) (29,549) (31,155)
Gain on extinguishment
of debt - - 38,873 -
Gain on sale of long-term
equity investment - - 5,259 32,518
Charge for impaired
investment (1,250) - (1,250) -
Other income (expense) 152 - (528) -
----------- ----------- ----------- -----------
Income (loss) before
taxes (65,411) (80,107) 64,402 (132,826)
Provision for income
taxes - - - -
----------- ----------- ----------- -----------
Net income (loss) $(65,411) $(80,107) $64,402 $(132,826)
=========== =========== =========== ===========
Basic net income
(loss) per share $(0.48) $(0.59) $0.47 $(0.98)
=========== =========== =========== ===========
Diluted net income
(loss) per share $(0.48) $(0.59) $0.47 $(0.98)
=========== =========== =========== ===========
Weighted average shares
outstanding, basic 135,825,716 135,341,265 135,801,881 135,310,548
=========== =========== =========== ===========
Weighted average shares
outstanding, diluted 135,825,716 135,341,265 136,879,538 135,310,548
=========== =========== =========== ===========
(a) 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 adjustment to prior
period financial statements, as applicable. Research and
development expenses, interest expense, net loss and net loss per
share (basic and diluted) as previously reported for the three
months ended June 30, 2008 were $67,455, $9,858, $74,190 and
$0.55, respectively. Research and development expenses, interest
expense, net loss and net loss per share (basic and diluted) as
previously reported for the six months ended June 30, 2008 were
$140,009, $19,709, $121,106 and $0.90, respectively.
(b) Includes stock-based compensation expense of $3,386 ($0.02 per
basic and diluted share) and $4,841 ($0.04 per basic and diluted
share) for the three months ended June 30, 2009 and 2008,
respectively. Includes stock-based compensation expense of $6,320
($0.05 per basic and diluted share) and $9,304 ($0.07 per basic
and diluted share) for the six months ended June 30, 2009 and
2008, respectively.
CONSOLIDATED BALANCE SHEET DATA:
As of As of
June 30, December 31,
2009 2008 (c)
-------- --------
(dollars in thousands)
Cash, cash equivalents and investments (d) $370,934 $372,939
Total assets (d) 670,075 686,832
Convertible subordinated debt (e) 339,034 417,597
Lease financing 247,622 246,477
Total stockholders' deficit (55,505) (136,304)
(c) As noted in footnote (a) above, FSP APB 14-1 required adjustment to
prior period financial statements. Total assets, convertible
subordinated debt, and total stockholders' deficit as previously
reported were $674,164, $510,000, and $241,375 as of December 31,
2008.
(d) Includes $69,346 and $69,360 in restricted investments at June 30,
2009 and December 31, 2008, respectively.
(e) Convertible subordinated debt is net of unamortized debt discount of
$64,816 and $92,403 as of June 30, 2009 and December 31, 2008,
respectively. Convertible subordinated debt at face value is
$403,850 and $510,000 as of June 30, 2009 and December 31, 2008,
respectively.
SOURCE Human Genome Sciences, Inc.
-0- 07/22/2009
/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 HGSI)
CO: Human Genome Sciences, Inc.
ST: Maryland
IN: HEA MTC
SU: ERN
PR
-- PH50356 --
4156 07/22/2009 16:05 EDT http://www.prnewswire.com
