Biotech Values

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Piper Jaffray: Human Genome Sciences' Benlysta Phase III Data Supports Approval; But Not Without Controversy

Presentations of the integrated data from the Human Genome Sciences (NASDAQ: HGSI) Phase III and Phase II trials highlighted durability of response and organ domain benefits of Benlysta. However, pooled safety data could be a point of contention at the FDA panel as higher rates of opportunistic infections, neoplasms, and mortality were seen, albeit in small numbers.

Piper Jaffray continues to expect an FDA advisory panel recommendation for approval to provide 10%+ upside to shares, but the stock is likely to trade lower before the panel. The additional risk is potential lack of lupus experts on the panel, which could fail to appreciate Benlysta's efficacy on top of best available treatment.

Ultimately, Piper expects data at ACR to lead to investors questioning Benlysta's market opportunity. We however remain comfortable with the launch, with our 2011 $178mn revenue estimate based on 7% penetration of moderate-to-severe patients; well below 20-25% cited by physicians at the ACR.
http://www.benzinga.com/analyst-ratings/analyst-color/10/11/598002/piper-jaffray-human-genome-sciences-benlysta-phase-iii-da