Following positive Phase II data in April of Lymphostat-B in treating rheumatoid arthritis, GlaxoSmithKline plc exercised an option to develop and commercialize the drug with its maker, Human Genome Sciences Inc.

For HGS, the deal means that a significant share of costs for Phase III trials and beyond will be covered. The companies are working to map out a development plan, and the timing of the Phase III trials partly will depend on Phase II data of Lymphostat-B in another indication - systemic lupus erythematosus (SLE) - expected this fall. All future development costs, marketing expenses and subsequent profits will be shared on a 50/50 basis.

"I think it's an incredibly important event for us," said David Stump, executive vice president of drug development at Rockville, Md.-based HGS. "It is certainly one of our lead products, and to have a partner the caliber of GSK, with the expertise and global reach and incremental resources they'll bring to the product, is hugely important for us."

HGS and GSK first came together in 1993 (when GSK was SmithKline Beecham plc). Three years later, the companies amended the original $125 million agreement to include the co-development option for GSK. The London-based pharmaceutical firm exercised the option on one other product several years ago, but the product did not progress past Phase II development. Lymphostat-B represents the second product that GSK has optioned.

The opt-in did not include a milestone payment, Stump said, and the only financial details disclosed were the plans to share costs and profits equally. In the coming months, GSK and HGS will work to specify terms of how LymphoStat-B will be co-developed and marketed. If HGS does any of the marketing, it will need to build its own sales force.

"For companies who are merging toward full integration in biotechnology, these kinds of co-development deals are a great substrate to enable that," Stump said. "It's perfectly in line with our viewed path toward full integration."

LymphoStat-B (belimumab) is a human monoclonal antibody that targets a naturally occurring survival factor called B-lymphocyte stimulator (BLyS), which keeps immune cells alive, making antibodies for the body. A person that lacks BLyS lacks the ability of the lymphocytes to produce antibodies.

"On the other hand, in autoimmune diseases, levels of the BLyS can be too high," Stump said, "and that leads to excess production of antibodies that are abnormal and attack one's own tissue."

HGS has found elevated levels of BLyS in the blood of patients not only with RA and lupus, but also with Sjogren's syndrome and idiopathic thrombocytic purpura, suggesting LymphoStat-B may have application beyond the initial two indications.

In April, HGS reported that LymphoStat-B met the primary efficacy and safety endpoints in a Phase II trial in RA patients, demonstrating the product is safe and well tolerated, biologically active, and statistically significant in terms of reducing the signs and symptoms of the disease. A detailed presentation of the data is expected to take place at a scientific meeting later this year.

While a number of therapies are marketed for RA, including Enbrel, Remicade and Humira - all billion-dollar drugs - Stump said there is still room in the market for a therapy like LymphoStat-B.

"I think RA is a common disease and not all patients have their disease adequately treated with these available, great drugs," he said. "There's plenty of room for a product there.

"Lupus is a really different story," Stump continued. "There hasn't been a new product made available for lupus in 30 or 40 years. These are patients that are often debilitated by the effects of this disease."

With about 1 million patients worldwide with SLE, LymphoStat-B is a therapy that could help up to half of them. The drug is intravenously infused monthly on an outpatient basis for the SLE and RA indications. LymphoStat-B was created by HGS in collaboration with London-based Cambridge Antibody Technology plc, the maker of Humira.

Centocor Inc., of Malvern, Pa., makes Remicade, while Thousand Oaks, Calif.-based Amgen Inc. owns Enbrel through its acquisition of Immunex Corp.

HGS' stock (NASDAQ:HGSI) rose 36 cents on Thursday, to close at $12.18.

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