Human Genome Sciences dissed: Lupus drug disappoints Wall Street

Wednesday, August 14th, 2013 By

lady gaga loves human genome sciences

Benlysta gives hope to people with Lupus, such as Lada Gaga, but Wall Street isn't so impressed with the drug's profit potential. Image: Wikimedia Commons

Human Genome Sciences has been developing a drug called Benlysta for the treatment of Lupus, a painful, deadly disease. Benlysta has been in trials conducted by the Food and Drug Administration to determine whether the drug is safe and effective. Benlysta has given people with Lupus hope, and the FDA appears to be on the verge of approving the drug. However, Wall Street downgraded Human Genome Sciences’ stock because people with Lupus won’t be charged as much for Benlysta treatment as investors had hoped.

Human Genome Sciences and Benlysta

Human Genome Sciences stock was downgraded Wednesday because sales revenue for Benlysta may not be as lucrative as they had once assumed. MarketWatch reports that analysts at Citigroup and Bank of America cut their stock-price targets for Human Genome Sciences before trading commenced. While Lupus sufferers wait in anticipation for potential life-saving relief, fearful investors worry about how much money they can make. Bank of America Analyst Rachel McMinn told MarketWatch that information provided by an FDA panel Tuesday “underscored concerns that Benlysta will have a smaller than expected role in lupus treatment.”

Good news for Lada Gaga

Human Genome Sciences’ Benlysta will be the first new treatment for lupus in 50 years. About 1.5 million Americans have Lupus. Lada Gaga may be the most prominent of them. Lupus tricks the body into attacking itself. Symptoms include skin rashes, aching joints and inflammation of vital organs. Current Lupus treatments come with serious side effects. Patients often have to choose between suffering from either Lupus or the side effects from treatment. There is no cure.

Bad news for Wall Street

In a one-year FDA study people with Lupus given Benlysta had greater improvement than people given standard treatment. However, the drug loses some of its effectiveness after the first year. This result has led McMinn to lower her estimate of Benlysta treatment from $40,000 per patient to $35,000. She downgraded Human Genome Sciences to “underperform” from “buy” and cut the price target from $33 a share to $24. A Citigroup analyst told MarketWatch that global sales for Benlysta, which investors had hoped would reach $2.6 billion by 2015, are now only expected to reach $1.6 billion.




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