FDA Panel Backs HGSI’s Benlysta

Human Genome Sciences Inc. (HGSI) received a huge boost when its potential blockbuster candidate Benlysta received a positive recommendation from an advisory panel of the US Food and Drug Administration (FDA). The Arthritis Advisory Committee voted 13-2 in favor of approving Benlysta for the treatment of patients suffering from systemic lupus erythematosus (SLE).

In addition to asking the panel to discuss the efficacy data, the FDA had asked the panel to discuss the safety profile of the drug as well. The panel was asked to concentrate on the safety signals of infection, malignancy, suicidality, and mortality imbalance favoring placebo over Benlysta. Apart from that, the panel was also asked to weigh the risks of using Benlysta in combination with other immunosuppressive agents.

A final decision from the FDA should be out by December 9, 2010. While the FDA is not bound to follow recommendation of its advisory panels, it usually does so.

Benlysta is being co-developed by Human Genome and GlaxoSmithKline plc (GSK). The Biologics License Application (BLA) seeking marketing approval for the lupus candidate in the US was filed by the companies on June 9, 2010. The Marketing Authorization Application (MAA) seeking approval for Benlysta in Europe was also filed with the European Medicines Agency (EMA) in the same month (June 4). The drug is under review in Europe.

The application included data from two late-stage trials, BLISS-52 and BLISS-76. Both double-blind, placebo-controlled, multi-center studies evaluated the efficacy and safety of Benlysta in combination with the standard of care against placebo plus standard of care in seropositive SLE patients. The studies evaluated a total of 1,684 patients.

We remind investors that Benlysta, a human monoclonal antibody that specifically recognizes and prevents the biological activity of B-lymphocyte stimulator (BLyS), met the primary endpoint in the BLISS-52 trial in 2009.

Furthermore, Benlysta met the primary endpoint in BLISS-76 through 52 weeks in November 2009. However, Benlysta did not prove to be more effective than placebo in the long term, according to the complete 76-week data from the BLISS-76 trial announced earlier this year.

Benlysta, if approved, would be the first new lupus drug to be approved in 50 years. Lupus is a potentially fatal autoimmune disease that is extremely difficult to treat.

Our Recommendation

Human Genome currently has a Zacks #3 Rank, which translates into a short-term Hold rating. We are also Neutral on the stock in the long term. We believe that the approval of the lupus drug will give a much-needed fillip to Human Genome and will help drive the company to profitability.

Earlier the company suffered a pipeline setback when it decided to stop the development of its hepatitis C candidate Zalbin. However, the long-term stability offered by the potential approval of Benlysta is the main reason behind our Neutral stance on the stock. We expect investor focus to remain on the FDA’s decision on Benlysta’s approvability status.

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