Human Genome to work with Novartis on Albuferon for potential $507.5 million in royalties

By E. Janene Geiss and Jennifer Lanning Drey

Philadelphia, June 6 - Human Genome Sciences, Inc. announced Tuesday an exclusive worldwide licensing agreement with Novartis AG for the development and commercialization of Albuferon (albumin-interferon alpha 2b) for chronic hepatitis C and all other uses.

Under the agreement, Human Genome and Novartis will co-commercialize Albuferon in the United States and will share U.S. commercialization costs and U.S. profits equally, according to a company news release.

"This is a very important step forward in fulfilling the promise of transforming HGS from primarily a discovery-based company, which we've been in our past, to the development and commercialization-focused company that we are today," said H. Thomas Watkins, chief executive officer for Human Genome, in a company conference call held Tuesday.

Novartis said it will be responsible for commercialization outside the United States and will pay Human Genome a royalty on those sales.

Human Genome and Novartis will share equally in clinical development costs, officials said.

Human Genome said it will receive an upfront fee of $45 million. Clinical development, commercial milestone and other payments to Human Genome could total as much as $507.5 million, including $47.5 million when the first patient is dosed in a phase 3 clinical trial.

"The economics of this collaboration are very strong," Watkins said during the call.

Human Genome had been looking to collaborate with a company that showed an interested in rapid clinical development and had global development and commercialization expertise as well as research to contribute to the Albuferon program, he said.

"This collaboration with Novartis will provide us with the resources and the additional developing and marketing strength that will help us ensure that Albuferon leads to its full potential," said Barry A. Labinger, executive vice president and chief commercial officer, during the call.

Human Genome said it will have primary responsibility for the bulk manufacture of Albuferon. The company said it expects to begin phase 3 clinical development by the end of 2006.

Clinical studies to date indicate that Albuferon could offer improved dosing in the treatment of chronic hepatitis C, with efficacy and safety at least comparable to the current standard of care, pegylated interferons.

The improved dosing would be a 2-week regiment, as opposed to a once-a-week dose, and would provide Albuferon an opportunity to achieve a leading share of the market, Labinger said during the call.

These results demonstrate that Albuferon is well-tolerated, remains in the blood substantially longer than is reported for recombinant interferon alpha and pegylated interferon alpha, and exhibits robust antiviral activity.

"We are very confident that Albuferon can become the best in class amino modulator for the treatment of chronic hepatitis C," said Watkins during Tuesday's call.

The company said the current market for interferon is estimated at about $2 billion and is expected to grow.

Albuferon is a novel, long-acting form of interferon alpha. It is a Human Genome Sciences drug created using the company's proprietary albumin fusion technology. This technology enables scientists to improve the pharmacological properties of therapeutic proteins by fusing the gene that expresses human albumin to the gene that expresses the active protein, officials said.

Novartis is a Basel, Switzerland, pharmaceutical company.

Human Genome is a Rockville, Md., biopharmaceutical company with a primary focus on development of protein and antibody drugs.

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