Human Genome Revises Offering – Analyst Blog | Stock Market News & Stocks to Watch from StraightStocks

Human Genome Revises Offering – Analyst Blog

Source: http://www.zacks.com/stock/news/23019/Human+Genome+Revises+Offering+-+Analyst+Blog
Posted on Thursday, July 30th, 2009 | In Market Commentary, Stocks to Watch

Contributed by: Zacks Market Commentaries (http://www.zacks.com/) -

Human Genome Sciences Inc. (HGSI) announced that it plans to raise approximately $310 million as net proceeds by selling 23.2 million common shares at $14 per share. This reflects an expansion of the initial public offering where the company had planned to sell 18 million shares in public.

The Rockville, Maryland-based company further stated that the underwriters would be given a month to buy up to an additional 3.48 million common shares to cover any over-allotments. The offering, expected to close on August 3, will lead to considerable dilution in the shareholder base.

Human Genome intends to use the proceeds for general corporate and acquisition or investment purposes. Additionally, this funding arrangement is also expected to provide cash for further development of the pipeline.

As a reminder, Human Genome has a robust and diversified pipeline which includes drugs to treat hepatitis C, lupus, anthrax, cancer, rheumatoid arthritis and HIV/AIDS. The company has recently filed a Biologics License Application for ABthrax for the treatment of inhalation anthrax. Zalbin (formerly Albuferon) has completed phase III development. The filing of global marketing applications is expected in fall 2009.

Additionally, the company has collaborations with pharmaceutical and biotech companies such as Amgen (AMGN), Genentech (DNA) (now part of Roche [RHHBY]), GlaxoSmithKline PLC (GSK), etc. These companies are conducting trials of additional drugs to treat cardiovascular, metabolic and central nervous system diseases.

The recently announced encouraging results of its lupus drug Benlysta is a big positive for the company. However, we would like to see results from another late-stage study for the same indication in November this year, before recommending the shares to investors as it is a high-risk program. Historically, lupus has been found to be difficult to treat. Therefore we are neutral on HGSI’s shares.
Read the full analyst report on “HGSI”
Read the full analyst report on “AMGN”
Read the full analyst report on “DNA”
Read the full analyst report on “RHHBY”
Read the full analyst report on “GSK”
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