By Matthew Willett

Human Genome Sciences Inc. plans to use Principia Pharmaceutical Corp. fusion technology it acquired in September to create a plasma protein-albumin fusion therapeutic in collaboration with pharmaceutical company Aventis Behring LLC.

HGS Chairman and CEO William Haseltine told BioWorld Today the deal demonstrates how the Principia acquisition allows for an expansion for the company in terms of drug development that could double its capacity for therapeutic commercialization.

The deal with King of Prussia, Pa.-based Aventis is for the formulation of a fusion therapeutic with a to-be-named plasma protein selected by mutual agreement. Financial terms of the agreement weren't disclosed.

And in a move that could finance similar deals, the company said after the market closed Thursday it will offer 8 million shares pursuant to the shelf registration it filed in September. At the company's opening stock price of $100.93 Thursday, the offering would gross $807.4 million. Its stock (NASDAQ:HGSI) closed at $91.43 Thursday, dropping $9.50.

Also Thursday, HGS, of Rockville, Md., said it filed an investigational new drug application for another fusion protein, Albuferon, an albumin-interferon alpha therapeutic for treatment of hepatitis C.

"I see this as two important consequences of our acquisition of Principia," Haseltine said. "The first is that it will provide a new and very strong pipeline for HGS, giving us new drugs to address existing markets."

The second, he said, is the partnership and collaboration opportunities the fusion technology opens for HGS.

HGS acquired Principia in a $120 million stock-swap deal last month. (See BioWorld Today, Sept.12, 2000.)

Further, the company earlier this week said that corporate partner SmithKline Beecham plc, of London, exercised its option to jointly commercialize repifermin, or keratinocyte growth factor-2 (KGF-2), HGS' novel growth factor. And last week HGS signed a deal under which Schering-Plough Corp. will develop an HGS interferon.

HGS, founded in 1992, recently completed enrollment for a Phase II clinical to evaluate repifermin for treatment of venous ulcers. A Phase II trial was initiated in 1999 to evaluate KGF-2 in treatment for mucositis in chemotherapy patients preparing for autologous bone marrow transplants. Examination of the compound for an ulcerative colitis indication is also planned.

HGS plans for the financing initiated Thursday to fund the expansion of its preclinical and clinical studies of protein-, gene- and antibody-based drugs; acceleration of research and development efforts; patent pursuit; expansion of production and manufacturing facilities; and the acquisition of complementary products or companies. Other stated uses of this financing include the development of partnerships, possibly joint development deals such as the Aventis collaboration.

"The Aventis deal demonstrates that HGS has a new platform technology we can share with other companies to help address their own problems of formulation, stability and manufacture," Haseltine said. "However, we also believe the transaction with Aventis Behring will be typical. We don't intend to be a service company, but rather to be a co-developer and a co-marketer."

The future for HGS is more of the same: more partnerships and more drugs, Haseltine said.

"A major problem of human proteins, as you can see from second-generation therapeutics, and even first-generation protein therapeutics being developed, is improving the half-life of the protein so that you can provide a more convenient dosage and reduce the toxicity," he said. "We think albumin fusion technology, when it works - and we feel it will work with most new drugs - is the preferred technology. The compounds are as active, they have greatly extended half-lives, even over their pegylated versions, and we won't have some of the problems that attend the inorganic solvents that are often required for depo-formulations."

In terms of pipeline expansion, potential partnerships and furthering HGS' internal development programs, the combination of recent partnerships and the Principia acquisition put HGS in a strategically enviable position, Haseltine said.

"Strategically, it adds an entirely new pipeline to our already large list of drugs and clinical trials," he said. "At the same time, the Aventis Behring deal shows that it allows us to acquire new drugs to sell."

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