Human Genome Sciences: A Nasty Market Pulls No Punches
1/23/2008 12:43 PM EST
Lots of hepatitis C news today: Human Genome Sciences (HGSI) is getting schmeissed on news that the high dose of albuferon, its long-acting interferon (and No. 1 drug in the pipeline,) appears to have an unacceptable safety issue. Dosing of the 1200 mcg dose was stopped in the ongoing phase III trials due to pulmonary side effects.
HGSI says that the 900 mcg dose of albuferon is okay, no safety problems, but in this market, investors are shooting first and burying the body before asking any questions. Heck, they're not even bothering to check for a pulse before piling on the dirt.
Two big issues here with HGSI and albuferon to explain why the stock has been cut in half: First, the 1200 mcg dose was given monthly, which if it worked, would have been the home-run scenario since regular interferon needs to be given weekly. Clearly, the belief now is that 1200 mcg has struck out and is done. Finished. Kaput.
Second, the 900 mcg albuferon dose is given every two weeks, so that still offers an advantage over weekly interferon. But in the earlier phase II study, there were higher rates of cough and shortness of breath in both the 900 mcg and the 1200 mcg albuferon arms. The big worry is that the FDA takes a look at this latest development and questions the safety of the 900 mcg dose as well. Even if the FDA is okay with the 900 mcg dose going forward, more side effects may limit its competitiveness against ordinary weekly interferon.
I'm being bombarded today with messages from buysiders offering doomsday scenarios for HGSI, essentially warning that the entire albuferon program might be on the verge of blowing up. There really isn't any hard evidence to back up that claim, but again, in this market environment, who needs proof? It's not like investors are willing to take on more risk.
And in the interest of full accountability: I've been bullish on HGSI here.
Position: none
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