Human Genome Sciences Inc.'s announcement that it determined thesequence of the Staphylococcus aureus bacterium on Thursdaypushed the stock up 26 percent, and moved the company into a wholenew area.

Human Genome's stock (NASDAQA:HGSI), which already was hotof late, gained $8.25 Thursday to close at $39.75 after reaching ahigh of $41.25. MedImmune Inc. (NASDAQ:MEDI), HumanGenome's collaborator on development of antibacterial vaccines,gained 13 percent on the news, or $2.25, to close at $19.25. There'sadded significance to that jump since MedImmune is underregistration for a 2 million share offering.

William Haseltine, chairman and CEO of Human Genome Sciences(HGS), didn't have much to say about the stock jump, be he talked toBioWorld Today about the significance of the news for HGS.

"It's the first demonstration of the use of our technology outside ofhuman genes," Haseltine said. "We did it in a remarkably short time[four weeks] using only a fraction of our capacity. Staph is a veryimportant problem. Any contribution to the prevention or treatmentof that disease will be significant."

Another significant part of the work is that it falls outside HGS'gene-identification and drug discovery collaboration with SmithKlineBeecham plc. They are working in humans only.

S. aureus is the most frequent cause of infections in hospitals, HGSsaid, and a major cause of toxic shock syndrome and woundinfections. Many strains have developed resistance to availableantibiotics.

HGS researchers deciphered more than 99 percent of the sequence ofthe approximately 2.8 million nucleotides, the company said, makingit the largest genome sequenced to date. About 1,400 genes havebeen identified that specify proteins similar to those described onother bacteria and organisms; more than 1,000 additional genes wereidentified that are not closely related to other genes.

"This is the first time we applied our technology to an area other thanhuman," Haseltine said. "It opens up a new area for us anddemonstrates the power of our technology."

Haseltine said there are a number of applications for the information.One is to create new vaccines with MedImmune, a task made easierby having the genome sequenced because that allows foridentification of most of the proteins that make up the outer shell ofthe organism.

"Each of the outer proteins is tagged with a secretory signal, whichcan be interpreted by our computers," Haseltine said. "Having theentire sequence gives you a tremendous amount of information."

Another application, he said, is it "dramatically expands the numberof targets useful for antibiotic development. It both identifies newmetabolic pathways that are specific to the bacterium, and identifiesthose genes that are common to the metabolic pathways of humansand bacteria. Having knowledge of both human and bacteriapathways will open up the possibility of creating antibiotics that areselectively toxic to bacteria.

MedImmune, of Gaithersburg, Md., will use high-throughput testingto evaluate vaccine candidates after HGS expresses and purifiesproteins.

HGS, of Rockville, Md., and MedImmune established theircollaboration in this area last year after publication by The Institutefor Genomic Research (HGS' not-for-profit partner) and others of thecomplete sequencing of the genes in the bacterium Haemophilusinfluenzae, another common pathogen and the first free-livingorganism to be sequenced.

Once MedImmune and HGS identify candidates to take forward,MedImmune assumes responsibility for development andcommercialization. An undisclosed profit-sharing agreement wouldcome into play on product sales.

The MedImmune collaboration also encompassesimmunotherapeutics. HGS has rights in antibiotic applications, whereit is seeking partners, Haseltine said.

A MedImmune spokesman said the work in H. influenzae is "fairlyfar along in the initial evaluation of some promising candidates." Hesaid MedImmune and HGS have chosen additional human pathogentargets, which they are not announcing.

HGS owns the intellectual property rights to the microorganismsMycoplasma genitalium and Methanococcus jannaschii in addition toH. influenzae and S. aureus. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.