By Debbie Strickland

Staff Writer

The Rockville, Md., genomics company one industry analyst calls the most "forward integrated" of the bunch is wrapping up its signature program of research into the genetics of bacteria that most plague developed countries.

Human Genome Sciences Inc.(HGS) has determined the genomic sequence of the bacterium Enterococcus faecalis, which annually infects more than 800,000 U.S. hospital patients. HGS scientists have sequenced more than 98 percent of the nearly 3 million nucleotides of the enterococcal genome.

The bacterium--the largest yet sequenced by HGS--contains approximately 4,000 genes, of which 3,000 resemble known genes. The remaining 1,000 bear little or no resemblance to genes previously described in other organisms.

"This is a very important step," William Haseltine, chairman and chief executive officer, told BioWorld Today. "It more or less completes our survey of the major human pathogens in the industrialized world."

The company will now focus its genomic sequencing expertise on gonorrhea and bacteria amok in the developing world, such as malaria and cholera.

The research was done "entirely" in-house, he said, and the company has filed a patent application describing diagnostic, vaccine and antibiotic development applications for the enterococcus genome information. HGS is seeking a partner to develop therapeutic products to fight the increasingly antibiotic-resistant bug.

The potential market is substantial: Between 1989 and 1993, the percentage of hospital-related enterococcal infections that were resistant against vancomycin grew from 0.3 percent to 7.9 percent. Annual U.S. treatment expenditures are in the $1 billion range, Haseltine estimated.

Since 1995, HGS and its affiliated non-profit research center, The Institute for Genomic Research, Gaithersburg, Md., have been sequencing the genomes of Haemophilus influenzae, Staphylococcus aureus, Escherichia coli and Streptococcus pneumoniae.

Working with partners, HGS is also sequencing genomes of bacteria that cause syphilis, lyme disease and tuberculosis, and has licensed from OraVax Inc., of Cambridge, Mass., the Haemophilus pylori genome sequence. The end goal of every project is a treatment or vaccine.

The company's centerpiece collaboration is with London-based SmithKline Beecham plc, which signed a $125 million exclusive licensing agreement in 1993, later revised to allow HGS exclusive rights to up to six proteins per year.

HGS this year will likely reach another milestone, the filing of its first-ever investigational drug application, which will involve a therapeutic human protein. Although Haseltine would not disclose the disease target, HGS' drug program focuses on tissue repair and cancer, especially ways of defending the body against chemotherapy.

Although the sequencing program has made more news in the last two years, the company's quieter drug-development effort is well worth watching, according to analyst David Molowa, of Bear Stearns Co., in New York.

"Only about 30 percent of their current effort is in sequencing, although that's what you hear a lot about," he said. "They do everything from in-vitro testing to small-animal models of disease."

Molowa rates the company as an "attractive" buy, noting, "They are the leading genomics company, and much more forward-integrated than the others."

HGS currently has about $200 million in cash, plus firm commitments totaling $90 million from research partners.

The company's stock (NASDAQ: HGSI) closed Friday at $36.25, down $0.75. *