Human Genome Sciences Inc's lupus drug is poised to win clearance this week, offering patients the first approved treatment option in a half-century and setting the company up for blockbuster sales.
Industry analysts widely expect Benlysta, one the most closely watched medicines of the year, to secure the Food and Drug Administration's blessing by Thursday.
Annual global sales may top $3 billion in 2015, according to Thomson Reuters consensus forecasts. The company will split Benlysta profits with British partner GlaxoSmithKline Plc.
The drug's approval will turn Human Genome from money-losing biotech to an industry star and takeover target.
You're going to have revenue for a long time from this product. You're going to become one of the big boys, said Avik Roy, an analyst at Monness Crespi Hardt. He predicts peak annual sales of more than $5 billion in 2019.
Human Genome shares have soared with hopes for Benlysta. Investors had largely written off the drug after early data were mixed. Shares fell below 50 cents in March 2009 but jumped later that year when the first encouraging Benlysta data was released.
On Monday, Human Genome shares were up 0.5 percent to $25.70 in afternoon trading on Nasdaq.
(To see a graphic of Human Genome's share price, click on http://r.reuters.com/syj48r )
Shares may gain about $2 on a positive FDA ruling, RBC Capital Markets analyst Michael Yee said. FDA approval will attract investors who avoided the shares when Benlysta's fate remained uncertain, he said.
Clearance has been expected since an advisory panel recommended the drug in a 13-2 vote last November. In December, the FDA delayed a final decision by three months.
Investors now want to see if regulators endorse Benlysta for a wide range of lupus patients or urge some limits.
Lupus is a debilitating and potentially fatal disease that has proved hard to treat. It causes the immune system to attack the body's own tissue and organs, leading to arthritis, kidney damage, chest pain, fatigue, skin rashes and other problems. The organ damage can be fatal.
An estimated 5 million people worldwide have the disease. Current drugs often fail to help or cause harsh side effects, such as severe bone loss from steroids.
In company-funded studies, more patients given Benlysta saw symptoms improve compared with current standard care, which typically includes immunosuppressant drugs such as Roche's CellCept and steroids such as prednisone.
CLAMOR FOR NEW OPTIONS
Supporters on the FDA advisory panel said lupus patients needed a new option even though Benlysta did not help everyone and some experts described the drug's benefits as mild.
The FDA likely will clear Benlysta for a pretty broad population of moderate to severe lupus patients, Yee said. The agency probably will require the prescribing instructions to note the drug has not been widely studied in black patients or people with severe kidney disease, he said.
Roy said he was reasonably optimistic the FDA would avoid sharp restrictions, partly due to a clamor from patients who have limited choices.
The last drug approved specifically for lupus was the antimalarial medicine quinacrine in 1958. Some patients take newer immunosuppressive drugs, but those have never been approved for lupus and offer limited relief.
The FDA is under considerable political pressure to approve the drug and not be antagonistic toward it. Lupus patients have been waiting five or six decades now for an FDA-approved treatment, Roy said.
Benlysta, known generically as belimumab, is given once a month by intravenous infusion. Analysts expect the drug will cost around $30,000 per patient annually, a price in line with biotech medicines for other autoimmune diseases.
The drug is designed to inhibit BLyS, a protein in the body that exists to keep B-cells functioning normally. B-cells make antibodies that prevent infection. In lupus patients, B-cells are overstimulated and make antibodies that attack the body.
Human Genome expects European approval for the drug in the second half of the year.
The drug's clearance makes it more likely (the company) would be acquired, analyst Yee said. Benlysta partner Glaxo is an obvious suitor. Johnson & Johnson and Abbott Laboratories Inc, which market big products for other autoimmune diseases, also could be interested, he said.
(Reporting by Lisa Richwine; Editing by Tim Dobbyn)