West Coast Editor

Mixed interim data from a pair of Phase II trials with its drug for hepatitis C virus sent Human Genome Sciences Inc.’s stock down 20.3 percent.

HGS disclosed early results showing Albuferon (albumin-interferon alpha 2b), given every other week, at 12 weeks worked as well as the standard of care, which is weekly Pegasys (pegylated interferon alfa-2a) from F. Hoffmann-La Roche Ltd. - but Albuferon given once per month failed to prove equivalency to Pegasys.

Wall Street apparently wanted better news. HGS’ shares (NASDAQ:HGSI) closed Tuesday at $10.89, down $2.78.

But Thomas Watkins, CEO of Rockville, Md.-based HGS, noted during a conference call that the results are the first head-to-head comparison with market leader Pegasys, "and quite honestly, we like what we see."

So did Frank DiLorenzo, analyst with Standard & Poor’s in New York, who upped his "hold" rating to "buy" and raised the price target from $15 to $16.

"Obviously it wasn’t a slam-dunk, but we think there was enough of a positive trend that the drug might work in a Phase III trial," he told BioWorld Today. "This is clearly a risk stock, but it makes more sense [to buy] at this level than before."

DiLorenzo added that he was "a little surprised" the shares fell so low.

Christopher Raymond, analyst with Robert Baird & Co. in Chicago, wrote in a research report that he finds the new data "intriguing," but noted that Pegasys "has shown similar [early virologic response] rates in a much larger trial, and we note that historically EVR has been a very good predictor of sustained virologic response," also called SVR, the endpoint in HGS’ Phase II trials.

"Albuferon’s less frequent dosing is an advantage over Pegasys; however, higher discontinuation rates could blunt that benefit," Raymond wrote.

HGS’ Phase IIb study, enrolling 458 patients, tested Albuferon with ribavirin in those with chronic HCV who are na ve to interferon alpha-based treatment regimens, and the other, classed as a Phase II trial, used the two drugs in previously treated patients with chronic HCV.

In the first experiment, patients got either Albuferon in a 900-microgram dose every 14 days, a 1,200-microgram dose on the same schedule, or a 1,200-microgram dose every 28 days. Patients in the Pegasys group were given the drug at a 180-microgram dose every seven days. The primary endpoint is SVR, defined as undetectable virus 24 weeks after completion of 48 weeks of treatment.

Albuferon knocked the virus to below quantifiable levels in 75 percent of patients in the higher, 14-day dose group; in 69 percent of the 900-microgram 14-day dose group; and in 53 percent of the patients in the group given 1,200 micrograms every 28 days.

In the Pegasys group, 66 percent saw their virus dip below measurable levels.

The study of treatment-experienced patients resulted in 30 percent of those taking Albuferon showing undetectable HCV levels after 48 weeks of treatment. Eighteen percent showed the same 12 weeks after treatment stopped.

That Phase II study design requires that about half of the subjects enrolled be patients who have failed combination therapy that included Pegasys plus ribavirin. A total of 115 patients have been enrolled into five Albuferon treatment groups. The primary efficacy endpoint, again, is SVR - undetectable virus 24 weeks after the end of therapy.

HGS said the data support going ahead with treatment that gives Albuferon every 28 days at higher levels, and the full Phase IIb, 12-week data will be presented in late April at the meeting of the European Association for the Study of the Liver in Vienna, Austria. Meanwhile, Albuferon will be evaluated at higher doses. If positive data keep coming from the Phase IIb study and other Phase II trials, HGS plans to meet with regulatory authorities regarding a Phase III program, possibly starting by the end of this year, Watkins said.

"Let’s hang in there and see how the data unfolds, before we conclude forever what the four-week arm is capable of achieving, particularly with these higher exposures," he said.

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