Can Human Genome Sciences pull out of its nosedive?
That's essentially the question that the Washington Post poses as it examines a high-profile biotech company that has stumbled at a critical point in its development. Investors punished HGS after they learned that its hep C drug Albuferon, while able to generate positive data with half the injections called for by current therapies, was no more effective than the drugs it would compete against. Its stock slid to only 55 cents a share, a 67 percent plunge.
HGS CEO H. Thomas Watkins is taking a confident stance on the company's prospects, of course, but ThinkEquity's Jason Kolbert is adopting a much more dour perspective. The Albuferon trial saw a high rate of attrition as patients bowed out of the study, leading him to question the drug's efficacy. And if the FDA takes the same view, that raises doubts about Albuferon's chances of success at the FDA.
Without the FDA's approval, he adds, HGS is going to face a serious dilemma as $400 million in convertible notes come due.
The wild card in play here is the upcoming release on data for HGS' experimental lupus therapy. Positive data on lupus could eradicate the deep fear that has rattled investors. In this market, it doesn't take much to panic the Street, or make it delirious.
- check out the article in the Washington Post