Human Genome Leads Biotech Sector Gain
Investors have been showing that they still like telecom stocks, but it’s the biotech sector that really pushes their buttons these days.
Human Genome Sciences Inc. (HGSI) demonstrated that Friday when its stock gained $12.38 to $145.38, bucking the general Nasdaq downturn, after the company said it’s ready to start testing a treatment that could boost production of antibodies in people with immune system disorders.
The protein, known as BLyS, will be tested in people suffering from a defect of the immune system called Common Variable Immunodeficiency, which affects “several thousand” people in the U.S., the company said. If BLyS shows promise in this group of patients, Human Genome may test the drug in patients suffering from certain forms of blood cancers.
“There is still a long way to go, but this is a critical first step,” said Lance Willsey, a physician and founding partner of DCF Capital, which invests in biotechnology but does not hold shares in Human Genome Sciences.
Still, only about 20% of drugs that enter human testing move successfully through advanced trials and win U.S. Food and Drug Administration approval.
Human Genome has several compounds in the second of three testing stages required by the FDA. These so-called Phase II studies are designed to measure how well a drug works. Data from a Phase II trial of Human Genome’s wound-healing product is to be presented at a September conference in Melbourne, Australia, the company said.
Excitement over new drugs has fueled gains in many biotech stocks in recent weeks. Indeed, the stocks have been the leaders of the Nasdaq market’s rebound since late May. And human-genome-research-related shares, such as Human Genome, have been the leaders within biotech.
Human Genome shares have more than doubled from $71.25 on May 23--though the stock still is far below its 2000 peak of $232.75 set in March.
Among recent IPOs, biotech offerings from Dendreon (DNDN) and Cepheid (CPHD) have performed well. And Friday, Charles River Labs (CRL), a company that supplies rats and mice for drug research and provides other services to drug companies, went public in a deal that sold 12.5 million shares at $16 each. The stock shot up to close at $22.
