Human Genome Sciences Inc. (HGSI) and GlaxoSmithKline plc (GSK) recently announced that the European Commission (EC) has approved Benlysta (belimumab) to be marketed as an add-on therapy in adult patients with active autoantibody-positive systemic lupus erythematosus (SLE), who have a high degree of disease activity despite standard therapy.
Human Genome and Glaxo have a definitive co-development and co-commercialization agreement, under which the former is responsible for conducting Benlysta’s late-stage trials, with assistance from Glaxo. The companies equally share development costs, sales, and marketing expenses, and profits of any product commercialized under the agreement.
The EC’s approval of Benlysta does not come as a surprise since the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) had already recommended the approval of the drug in May. The committee’s positive opinion was based on the data derived from two late-stage trials, BLISS-52 and BLISS-76. The studies evaluated about 1700 adults suffering from autoantibody-positive active SLE.
We remind investors that Benlysta was approved in the US in March this year and in Canada in July. Further, the drug is currently under review in Australia, Switzerland, Russia, Brazil, The Philippines, Israel, Singapore, Taiwan and Colombia. We believe that the approval of Benlysta in additional territories would spur further top-line growth at Human Genome.
We note that both the US Food and Drug Administration (FDA) and the EC have approved Benlysta with certain restrictions. The drug has not been recommended to treat patients suffering from severe active lupus nephritis or severe active central nervous system lupus, as Benlysta has not been evaluated for these indications. Moreover, the drug is not recommended to be used in conjunction with other biologics or intravenous cyclophosphamide.
Our View
We currently have a Neutral recommendation on Human Genome. The stock carries a Zacks #3 Rank (Hold rating) in the short run. We believe that the approval of the lupus drug in the US as well as EU has given a huge boost to Human Genome, which should help drive the company to profitability. However, we prefer to remain on the sidelines till we gain more visibility on Benlysta’s initial sales ramp.
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