Shares of Human Genome Sciences spiked as high as 45 percent on speculation about upcoming late-stage data on its lupus drug Benlysta. And the gyrations in share price occurred despite some deep skepticism in the ranks of analysts.
Analysts say they have a lot of reasons to doubt that HGS can pull off a positive trial for lupus. Mid-stage data on the program was disappointing and the history of systemic lupus erythematosus, or SLE, has been littered with the failures of other experimental drugs.
"We note that historically, drug development in SLE has been extremely difficult...and view the Benlysta program similarly; with cautious skepticism, following recent SLE failures," UBS analyst Maged Shenouda wrote. Biogen Idec, Genentech and La Jolla have all tried and failed in this arena. Leerink Swann's Joseph Schwartz is one of the few optimists, giving HGS a 60 percent shot at success.
HGS is under no illusions about the risks it faces. "Lupus has been a difficult disease to study, and a lot of recent drug failures have made people skeptical that anything will work," Barry Labinger, the company's executive vice president and chief commercial officer, told the Wall Street Journal earlier in the week.
HGS is scheduled to release the late-stage numbers on Monday.