NEW YORK, March 14 (Reuters) - Human Genome Sciences Inc. <HGSI> on Tuesday presented interim results from a study of its experimental hepatitis C drug that met with mixed reviews from Wall Street analysts and its shares fell 20 percent.
Human Genome said early results from the mid-stage trial suggest its drug, Albuferon, works at least as well as the current standard of care with more convenient once-every-two-weeks dosing.
But at least one analyst underwhelmed by the data cut his rating on the company's stock to "neutral" from "buy." First Albany Capital analyst David Webber said in a research note that less frequent dosing was not enough of a competitive advantage and that he expects later trials of Albuferon will be designed to show non-inferiority to current treatments rather than superiority.
In addition to lowering his rating on the stock, Webber cut his Human Genome price target to $11 from $15 and dropped his 2010 earnings estimates to $1.04 per share from $1.38 based on diminished Albuferon sales estimates.
There was also some disappointment over the viral response rates to Albuferon at once-a-month dosing, but other analysts viewed the once-every-two-weeks data as largely positive.
"If the once-a-month data were equivalent, it would have been a home run," said Piper Jaffray analyst Edward Tenthoff, who saw the stock sell-off as a buying opportunity. "Efficacy is what primarily drives the hepatitis C market," he said.
Tenthoff predicted Albuferon would be approved in 2010 and reach peak annual sales of $2 billion by 2015.
He said physicians and patients have shown a willingness to switch therapies if it means less frequent dosing in treating the dangerous liver disease.
Webber estimated 2010 sales of $572 million, down from his prior forecast of $763 million.
The company plans to present complete data from the trial next month. If positive results continue to emerge, it expects to begin late-stage trials by the end of this year, it said.
"The interim results available to date from our Phase 2b trial are encouraging and supportive of our broadening the program of clinical study of Albuferon," David Stump, Human Genome's executive vice president for drug development, said in a statement.
Analysts said they expect Human Genome to reach a deal with a partner for the drug this year.
The data unveiled on Tuesday came after 12 weeks of a 458-patient trial that is expected to last 48 weeks. The goal of the study, which is testing Albuferon in combination with ribavirin, is to get the hepatitis C virus down to undetectable levels in the blood after 24 weeks of treatment.
Ribavirin is a component of the standard treatment for the hepatitis C virus.
Albuferon was given once every two weeks compared with the weekly dosing of the standard pegylated interferon treatment.
Human Genome said the early results showed its drug demonstrated greater antiviral activity when compared with Roche Holding AG's <ROG.VX> Pegasys in patients receiving interferon-based treatment for the first time.
The company said 75 percent of patients who received 1200 micrograms of Albuferon every two weeks reached undetectable levels of the virus, compared with 66 percent for the standard Pegasys group.
At 900 mcg of Albuferon, 69 percent of patients reached a viral level below detection. That dropped to just 53 percent in the 1200 mcg once-a-month dosing group, the company said.
Human Genome said it would continue to explore a once-a-month regimen with higher doses of the drug.
The company also released early results from a mid-stage study of Albuferon in patients who had failed previous treatments, saying the drug appeared to be safe and showed antiviral activity.
Shares of Human Genome fell $2.77, or 20.3 percent, to $10.90 on Nasdaq shortly before the close. <<
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