Biotech Values

[DewDiligence]

HGSI Falls on Drug ‘Swap’ with GSK

http://biz.yahoo.com/ap/080417/human_genome_sciences_mover.html

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Thursday April 17, 12:13 pm ET

NEW YORK (AP) -- Shares of Human Genome Sciences fell Thursday after the biotechnology company bought back the rights to its cancer treatments, a move one analyst said eliminates the possibility of a buyout.

Late Wednesday, Human Genome Sciences Inc. repurchased the full rights to two cancer drugs candidates it had sold to GlaxoSmithKline PLC. In return, HGS will receive smaller royalty payments on sales of Syncria, a diabetes drug candidate.

Citi analyst Yaron Werber said Glaxo now has little reason to buy the Rockville, Md., company, and downgraded the stock to "Hold" from "Buy," removing it from his "Top Picks Live" list. He cut his price target to $8 per share from $10.

Werber said HGS will take a "substantial" cut in royalty rates. He added that while Syncria looks like a promising drug candidate, the potential of the two cancer drugs -- ETR-1 and ETR-2 -- is less clear.
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