Human Genome Resubmits BLA - Analyst Blog

By Zacks Equity Research,

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Human Genome Sciences Inc. ( HGSI ) recently announced that the US Food and Drug Administration (FDA) accepted the company's resubmitted Biologics License Application (BLA) for raxibacumab. A decision from the US regulatory body is expected in the final quarter of the year (target date: December 15, 2012).

Raxibacumab is being developed for the treatment of inhalational anthrax. The candidate carries fast track and orphan drug designations for the treatment of anthrax disease.

Human Genome had submitted a BLA to the FDA in May 2009 for raxibacumab. The application was subsequently accepted and granted priority review. However, in November 2009, the company received a complete response letter (CRL) from the US regulatory body asking for additional data on the candidate.

Human Genome is under contract to deliver doses of raxibacumab to the US Strategic National Stockpile, which stores huge quantities of medicine and medical supplies for use in national emergencies such as flu outbreaks, terrorist attacks or earthquakes that are lethal enough to deplete local supplies.

In July 2009, the US government exercised its option to purchase 45,000 additional doses of raxibacumab for the Strategic National Stockpile, to be delivered over a three-year period. This order is in addition to 20,000 doses delivered to the Stockpile earlier.

The company expects to receive approximately $142 million from the second award as deliveries are completed. As of March 31, 2012, Human Genome received $123.5 million. Human Genome is eligible to receive an incremental $20 million under the contract if the FDA approves raxibacumab.

Meanwhile, the company has been in the news with GlaxoSmithKline plc ( GSK ) announcing its intention to acquire the former for $13 per share in cash. Human Genome's board of directors rejected the offer saying the price was inadequate. Glaxo subsequently went hostile and launched a tender offer which is now scheduled to expire on July 20, 2012. As of late June 2012, less than 1% of Human Genome's shares had been tendered.

Our Recommendation

We currently have a Neutral recommendation on Human Genome, which carries a Zacks #3 Rank (Hold rating) in the short run. We expect investor focus to remain on the Glaxo buyout bid.

GLAXOSMITHKLINE (GSK): Free Stock Analysis Report
HUMAN GENOME (HGSI): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: CRL , GSK , HGSI

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