Human Genome Sciences

Human Genome Sciences Inc. has successfully conquered significant clinical and regulatory hurdles to get U.S. approval of its lupus drug Benlysta late Wednesday, but now it faces the task of actually selling the drug.

Most analysts expect billions of dollars in sales for the drug, but the Rockville, Md., company has been careful to control expectations. The next set of challenges, while not as historic as landing the first new lupus treatment in 50 years, are well-known: Benlysta isn't cheap, reimbursement is complicated and patients aren't expected to use it unless they fail prior therapies.

Human Genome has declined to say how many patients it expects to take the drug, other than to note that about 200,000 patients fit Benlysta's criteria. Lupus occurs when the body attacks itself, causing inflammation and tissue damage virtually anywhere in the body, but there aren't many treatments available and physicians are eager for more options.

"Don't expect a ramp that is enormously high, but we're confident that the drug will gain traction in a steady fashion," Chief Executive Thomas Watkins said in an interview Thursday, noting that initial sales are difficult to project. "We don't think it is terribly useful to give specific numbers for guidance until we know what is going on here."

Sanford Bernstein analyst Geoffrey Porges expects an initial wave of 2,000 to 3,000 well-informed patients to initially take the drug, followed by a more gradual adoption as insurers establish their coverage practices.

Porges notes that "Benlysta will entail a significant time and financial commitment for patients and physicians," but he expects patients to largely remain on the drug once they start.

On a conference call late Wednesday, the company said that two-thirds of potential Benlysta patients are covered by private insurers that will likely cover the drug immediately. For those using Medicare and Medicaid, coverage decisions may take weeks or month, depending on the region.

The companies will charge about $35,000 per year for each patient, a level that was in the range of the company's previous projections, but above what most Wall Street analysts expected. Credit Suisse had expected about $30,000 a year and raised its peak sales estimate Thursday to $3.2 billion from $3 billion.

Human Genome's stock recently rose 13% to $28.98 as the broader market fell sharply, but the company's shares remain close to levels seen after a second clinical trial confirmed the drug's success in November 2009.

Although actually selling a drug is a new challenge for Human Genome, it stressed the experience of its sales force in helping physicians with reimbursement for the drug.

Physicians will have to use the "buy-and-bill" method, meaning that they must acquire the drug and then charging an insurer, in contrast to simply writing a prescription to be filled. As Amgen Inc. (AMGN) recently learned with the launch of osteoporosis drug Prolia, that process can slow physicians from initially using the drug in a lot of patients.

Chan Harjivan, head of consulting firm PRTM's global public health practice, noted that the drug's proved effectiveness is modest and that could also slow its adoption. He expects insurers and physicians to carefully monitor Benlysta's usefulness, noting that the drug's effect on the immune system may lead to serious side effects emerging with longer-term use, something that could severely affect its adoption. Human Genome plans to conduct some post-approval safety and effectiveness studies.

"With any medication, until you see it in large numbers of patients over many years, it is important to be vigilant about the safety profile," Watkins said Thursday, noting that some clinical trial patients have been on Benlysta since 2003.

The company doesn't expect supply constraints to be an issue, something that has impacted some biologic drug launches in the past. It has enough inventory to supply global demand for more than a year; its Maryland production facility can supply 50,000 to 60,000 patients per year, and a contract manufacturing facility will triple that capacity next year.

It is also working on a subcutaneous injection of the drug, which Watkins said should make the drug more attractive to patients with more mild forms of lupus. The drug is now given as a intravenous infusion.

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