Human Genome Sciences Inc said its experimental lupus drug Benlysta eased symptoms in more than 43 percent of patients who took it in a clinical trial, paving the way for approval of the first new treatment for the disease in 50 years.
The news sent Human Genome's shares up 33 percent, adding $1 billion to its market value and turning the once unloved company into the hottest biotech story of the year.
Data from a late-stage clinical trial showed patients who took a high dose of the drug, in combination with standard therapies, experienced a significant improvement in symptoms compared with those taking standard treatments in combination with a placebo.
The results met the main goal of the trial, which was the second of two needed for the drug to be considered for approval by the U.S. Food and Drug Administration.
Rockville, Maryland-based Human Genome said it expects to file its marketing application early next year, and could have the drug on the market by the end of 2010.
Lupus, a disease that affects an estimated 5 million people worldwide, causes the immune system to attack the body's own tissue and organs, leading to arthritis, kidney damage, chest pain, fatigue and skin rash, among other problems.
This is a pivotal moment in lupus research, said Margaret Dowd, president of the Lupus Research Institute, an organization that funds lupus research but did not fund Human Genome's trial.
Analysts expect the drug to generate annual sales of at least $1 billion and potentially much more. Human Genome will split profits from the drug with its larger partner, GlaxoSmithKline Plc.
Data from a composite of three measures in the latest trial showed that after 52 weeks, 43.2 percent of patients taking 10 milligrams of Benlysta in combination with standard therapies achieved an improvement in symptoms, with no significant worsening of the disease in individual organs.
That compared with 33.8 percent of patients taking a placebo plus standard care.
Over the past three months, Human Genome Science has undergone a Cinderella-like transformation. Investors had written Benlysta off after mid-stage studies proved uninspiring. In early March, the company's shares were trading at just 45 cents each.
But those who maintained the faith, including shareholders such as Fidelity Investments, Barclays Global Investors, T. Rowe Price and Taube Hodson Stonex Partners, have done spectacularly well.
Top shareholder Fidelity, which held 23.34 million shares as of July 31st, according to regulatory filings, made a theoretical profit of $143.5 million between the close of the market on Friday and Monday's opening bell.
Thomas Watkins, the company's chief executive, added more than $1 million to his net worth over the same period.
Still, results of the trial, known as BLISS-76, were not as robust as those from an earlier late-stage trial known as BLISS-52. The drug did not work to a significant extent at a lower dose, and it did not significantly reduce the need for patients to take steroids, which are a mainstay of current treatment that can cause serious side effects at high doses.
These were secondary goals of the trial and not required to be successful in order for the drug to be approved.
The fact that BLISS-76 missed key secondary endpoints is not a major concern to us, said Cory Kasimov, an analyst at J.P. Morgan. Indeed, we believe it reinforces just how difficult it is to crack lupus, and highlights Benlysta's strong competitive position, which could border on monopoly-like status for a significant period of time.
Part of the reason the results were slightly weaker in the latest trial is because patients were treated in different geographies, Barry Labinger, Human Genome's chief commercial officer, said in an interview.
The latest trial involved patients in the United States and Europe. BLISS-52 involved patients in Latin America, Asia and Eastern Europe.
Patients in both trials had slightly different levels of background therapy, which could have influenced results, Labinger said.
The BLISS-52 trial showed 57.6 percent of patients taking a high dose of Benlysta in combination with standard care showed an improvement in symptoms, compared with 43.6 percent of patients taking standard care plus a placebo.
In the latest trial, serious side effects were reported in 26.8 percent of patients taking Benlysta, known generically as belimumab, compared with 24 percent of patients taking a placebo.
Labinger said the number of lupus patients under the care of a rheumatologist in the United States is about 325,000. Of those, some 200,000 have a moderate to severe form of the disease. This is the patient population that will initially be targeted.
The company has not yet nailed down a price for the drug, but Labinger said biologic drugs that treat rheumatoid arthritis and multiple sclerosis, which are also autoimmune disorders, range between $15,000 and $30,000 per patient per year.
Benlysta is given once a month by IV infusion. The drug is designed to inhibit BlyS, a naturally occurring protein in the body that exists to keep B-cells functioning normally. B-cells make antibodies that prevent infection. In patients with lupus, B-cells are overstimulated and produce antibodies that attack the body.
Human Genome shares rose $6.18 to $24.87 in afternoon trading on Nasdaq. In London, GlaxoSmithKline shares dipped 0.2 percent.
(Reporting by Toni Clarke and Ben Hirschler; Editing by Gerald E. McCormick and John Wallace)