Schering-Plough Corp. acquired exclusive rights to two human antibodies derived from Human Genome Sciences Inc.'s technology, thereby completing HGS's obligations to Schering as defined by the Human Gene Therapeutic Consortium.
HGS would receive milestone payments and royalties from products that result from either antibody. Schering-Plough, of Madison, N.J., had options to two therapeutic proteins, one of which it picked up in October 2000, deciding to develop and commercialize a type of interferon. That left Schering-Plough with one protein option.
"Rather than retain [its] additional option, we granted Schering-Plough exclusive licenses to two antibody targets," said William Haseltine, president and CEO of Rockville, Md.-based Human Genome Sciences. "That satisfied our agreement with them. They are now developing three products."
Besides the three products taken directly from HGS, Schering-Plough is working on "a large number of small-molecule drug and antibodies, based on our technology," Haseltine told BioWorld Today. HGS is entitled to milestone payments and "double-digit or close to double-digit" royalties on those products.
The Human Gene Therapeutic Consortium began in 1993. The consortium first involved only SmithKline Beecham (before it became GlaxoSmithKline plc, of London), but grew to include Schering-Plough; Takeda Chemicals Inc., of Osaka, Japan; Merck KGaA, of Darmstadt, Germany; and Sanofi-Synthelabo, of Paris. All had access to HGS's technology and intellectual property until the consortium ended in July 2001. Individual agreements between HGS and the firms give HGS potential milestone payments and royalties for developed products, although HGS has co-promotion and co-marketing rights in North America and Europe for GlaxoSmithKline products. (See BioWorld Today, July 3, 2001.)
Industry observers credit the consortium with fueling the genomics drug discovery revolution in the late 1990s and into 2000. Haseltine said the partners in the consortium collectively are working on 460 programs based on about 230 human genes. Of the 11 drugs based on genomics that have entered clinical trials, "all but two originate from HGS research," Haseltine said. "So far, so good."
Last week, HGS received an undisclosed milestone payment from GlaxoSmithKline related to the initiation of Phase I trials of SB-462795 in patients with osteoporosis. Glaxo has another product in Phase I trials, a compound designed to reduce the inflammation component related to cardiovascular disease.
HGS has been in a somewhat difficult position - the consortium was of great benefit to genomics drug discovery and HGS technology has been the source for hundreds of programs, but the company was, at times, confined by the partnerships. Since July 2001, HGS has been free to form partnerships as it likes, but found it has had to correct misconceptions about itself.
With a history of mining the genome, some wrongfully assume HGS is a tools company, or a bioinformatics company, Haseltine said. That is not so, he said, as HGS is focused on products. Also, some in the industry assume GlaxoSmithKline has rights to all of HGS's products. While it does have rights to some, such as Repifermin, in Phase II trials for mucositis in patients undergoing chemotherapy with bone marrow transplantation (GSK will join HGS for the Phase III trials and help market the drug), GSK does not own HGS's pipeline.
"That's not true," Haseltine said. "It's a limited set. [GSK] has rights to less than 20 percent of all of our compounds."
Yaron Werber, an analyst with SG Cowen Securities Corp., said in a research note, "In [SG Cowen's] view, HGS continues to deliver on its promise to advance genomics-derived candidates into the clinic and has the most extensive genomics-derived pipeline in the sector."
HGS now will focus on progressing its own drugs through development, as well as look to add additional manufacturing and marketing capabilities, Haseltine said. HGS has said it has a goal of signing a product-orientated deal by the end of the year. That goal remains - the Schering-Plough deal doesn't change that - but HGS also has a larger target in mind.
"The original goal was to create a fully integrated, global pharmaceutical company," Haseltine said. "That's the goal we set in 1992 and that remains the goal today."
HGS's stock (NASDAQ:HGSI) rose 90 cents Wednesday to close at $14.47.