Human Genome Sciences, Inc. (“HGS” or the “Company”) is a commercially focused biopharmaceutical company advancing toward the market with three products in late-stage development: BENLYSTAtm for systemic lupus erythematosus (“SLE”), ZALBINtm for chronic hepatitis C, and raxibacumab for inhalation anthrax.
BENLYSTA and ZALBIN continue to progress toward commercialization. In July and November 2009, we reported that BENLYSTA successfully met its primary endpoints in two Phase 3 clinical trials in patients with systemic lupus. We and GlaxoSmithKline (“GSK”) plan to submit marketing applications for BENLYSTA in the United States and Europe in the second quarter of 2010. In March 2009, we reported that ZALBIN successfully met its primary endpoint in the second of two Phase 3 clinical trials in chronic hepatitis C. HGS submitted a Biologics License Application (“BLA”) for ZALBIN in the United States in November 2009, and Novartis submitted a Marketing Authorization Application (“MAA”) under the brand name JOULFERON® in Europe in December 2009. We received confirmation from the U.S. Food and Drug Administration (“FDA”) in February 2010 that the BLA submission was accepted for filing with a Prescription Drug User Fee Act (“PDUFA”) date of October 4, 2010.
In the first half of 2009 we achieved our first product sales and recognized $162.5 million in product sales and manufacturing and development services revenue by delivering 20,001 doses of raxibacumab to the U.S. Strategic National Stockpile (“SNS”). In July 2009, the U.S. Government (“USG”) exercised its option to purchase 45,000 additional doses to be delivered over a three-year period. We expect to receive a total of approximately $152.0 million from the second order, including $17.7 million in revenue recognized from our first delivery under the new award in the fourth quarter of 2009. In May 2009, HGS submitted a BLA to the FDA for raxibacumab for the treatment of inhalation anthrax. We received a Complete Response Letter in November 2009, and we continue to work closely with the FDA to determine the additional steps necessary to obtain approval.
In addition to these products in the HGS internal pipeline, we have substantial financial rights to two novel drugs that GSK has advanced to late-stage development. In December 2009, GSK initiated the second Phase 3 clinical trial of darapladib, which was discovered by GSK based on HGS technology, to evaluate whether darapladib can reduce the risk of adverse cardiovascular events such as a heart attack or stroke. With more than 27,000 patients enrolled, the Phase 3 clinical program for darapladib is among the largest ever conducted to evaluate the safety and efficacy of any cardiovascular medication. In the first quarter of 2009, we received a $9.0 million milestone payment related to GSK’s initiation of a Phase 3 program to evaluate the safety and efficacy of Syncria® (albiglutide) in the long-term treatment of type 2 diabetes mellitus. We created Syncria using our proprietary albumin-fusion technology and licensed it to GSK in 2004. Six Phase 3 trials of Syncria are currently ongoing.
HGS also has several novel drugs in earlier stages of clinical development for the treatment of cancer, led by our TRAIL receptor antibody mapatumumab and a small-molecule antagonist of IAP (inhibitor of apoptosis) proteins.
Strategic partnerships are an important driver of our commercial success. We have co-development and commercialization agreements with prominent pharmaceutical companies for both of our lead products — GSK for BENLYSTA and Novartis for ZALBIN. Raxibacumab is being developed under a contract with the Biomedical Advanced Research and Development Authority (“BARDA”) of the Office of the Assistant Secretary for Preparedness and Response (“ASPR”), U.S. Department of Health and Human Services (“HHS”). Our strategic partnerships with leading pharmaceutical and biotechnology companies allow us to leverage our strengths and gain access to sales and marketing infrastructure, as well as complementary technologies. Some of these partnerships provide us with licensing or other fees, clinical development cost-sharing, milestone payments and rights to royalty payments as products are developed and commercialized. In some cases, we are entitled to certain commercialization, co-promotion, revenue-sharing and other product rights.
In the second half of 2009, we received $812.9 million in net proceeds from two public offerings of our common stock, bringing our cash and investments at year-end 2009 to $1.2 billion. With a strong cash position, a management team experienced in bringing products to market, an experienced drug development organization and significant capabilities in biologicals manufacturing, we believe HGS has the resources and capabilities necessary to achieve near-term commercial success while sustaining a viable pipeline that supports the long-term growth of the Company.
We are a Delaware corporation headquartered at 14200 Shady Grove Road, Rockville, Maryland, 20850-7464. Our telephone number is (301) 309-8504. Our website address is www.hgsi.com. Information contained on our website is not a part of, and is not incorporated into, this annual report on Form 10-K. Our filings with the SEC are available without charge on our website as soon as reasonably practicable after filing. HGS, Human Genome Sciences, BENLYSTA, BLyS and ZALBIN are trademarks of Human Genome Sciences, Inc. Other trademarks referenced are the property of their respective owners.
Over the last few years, HGS has made strategic decisions that have transformed the Company on multiple levels and created multiple paths for success. Our two lead products, BENLYSTA and ZALBIN, have significant therapeutic potential and the commercial potential to achieve important positions in the marketplace. Raxibacumab continues to generate revenues under our contract with the USG. Key strategies include:
•Continue to accelerate the development and commercialization of our late-stage products. Our priority focus is on completing clinical development, obtaining regulatory approvals, and preparing for the global launch and commercialization of BENLYSTA and ZALBIN.
•Build strong partnerships with global leaders in the pharmaceutical industry. The co-development and commercialization agreements we have in place with GSK for BENLYSTA and Novartis for ZALBIN could help HGS assure that these products achieve their full therapeutic and commercial potential. As our earlier-stage products continue to progress, we will consider each individually to assess whether similar collaborations are strategically beneficial.
•Ensure sustainable growth into the future by continuing to invest in our mid- and early-stage clinical pipeline. We have taken a number of actions to strengthen our oncology program. Three randomized chemotherapy combination trials of our TRAIL receptor antibody mapatumumab (HGS-ETR1) are currently ongoing to evaluate its potential in the treatment of specific cancers, including non-small cell lung cancer, multiple myeloma and hepatocellular cancer. In November 2009, we initiated a Phase 1 trial of our lead IAP inhibitor HGS1029 as monotherapy in patients with advanced lymphoid tumors. HGS1029 as monotherapy is also being studied in an ongoing Phase 1 study initiated in 2008 in patients with advanced solid tumors. Our novel small-molecule inhibitors of IAP proteins show early promise in the treatment of a number of cancers, and we plan to continue the study of HGS1029 both alone and in combination with other anti-cancer agents, including mapatumumab. We will remain opportunistic in our search for new product candidates, assessing the best of the therapeutic opportunities discovered by HGS alongside therapeutic opportunities discovered by other organizations.
•Pursue strategic acquisitions and collaborations. We will pursue strategic acquisitions and collaborations to augment our capabilities, provide access to complementary technologies, and expand our portfolio of new drug candidates. We also rely on collaborations for the development of certain products discovered by HGS or others based on our technology, including those to which we have substantial financial rights in the GSK clinical pipeline. In addition, we are engaging in collaborations to leverage our extensive capabilities in protein and antibody process development and manufacturing to produce near-term revenue.
•Capitalize on our intellectual property portfolio. We pursue patents to protect our intellectual property and have developed a significant intellectual property portfolio, with hundreds of issued U.S. patents covering genes, proteins, antibodies and proprietary technologies. We have also filed U.S. patent applications covering many additional discoveries and inventions. We will seek opportunities to monetize intellectual property assets that we do not plan to develop ourselves internally.
•Maintain a strong cash position. HGS has cash resources in place that allow us to maintain a priority focus on advancing our late-stage products to commercialization, while also exploring longer-term opportunities that will drive momentum beyond our lead products. While we expect net cash burn in 2010 to increase as we prepare for commercialization, controlling net cash burn and maintaining a strong cash position will continue to be an important ongoing priority.
HGS has three products in late-stage clinical development: BENLYSTA for systemic lupus, ZALBIN for chronic hepatitis C, and raxibacumab for inhalation anthrax. We also have substantial financial rights to certain products in the GSK clinical pipeline. GSK has advanced two of these products to Phase 3 clinical trials, darapladib for cardiovascular disease and Syncria for type 2 diabetes mellitus. In addition, we have a portfolio of novel drugs in earlier stages of development, led by our TRAIL receptor antibody mapatumumab in mid-stage development for cancer.
As of February 1, 2010 we had approximately 850 full-time employees. None of our employees is covered by a collective bargaining agreement and we consider relations with our employees to be good.