Human Genome Sciences takes smaller 1Q loss

NEW YORK (AP) -- Human Genome Sciences Inc. said it took a smaller first-quarter loss as Wall Street continued to consider the potential sale of the lupus drugmaker.

After the market closed on Tuesday, Human Genome Sciences reported a first-quarter loss of $93.5 million, or 47 cents per share. A year ago it lost $131 million, or 69 cents per share. Revenue nearly doubled to $47.1 million from $26.6 million. That revenue included $31.2 million from its lupus drug Benlysta, which was approved in early 2011.

Analysts expected the Rockville, Md., company to take a loss of 39 cents per share and $46.2 million in revenue, according to FactSet.

Human Genome Sciences markets Benlysta through a partnership with the drug's co-developer, British pharmaceutical giant GlaxoSmithKline PLC. On Thursday GlaxoSmithKline offered to buy the company for $2.59 billion, or $13 per share, but Human Genome Sciences said that offer was too low. The company has hired two investment banks to help it consider other strategic options.

During a conference call with analysts and investors, Human Genome Sciences discussed a variety of other experimental drugs in its pipeline. Those include two late-stage drugs intended to treat heart disease and diabetes, and treatments for cancer and Alzheimer's disease in mid-stage testing. The company also makes the inhaled anthrax drug Abthrax, and it is studying Benlysta as a treatment for other conditions.

President and CEO H. Thomas Watkins said the heart drug, darapladib, "has the potential to be a future blockbuster and a significant value driver for our company." That drug is also part of the company's collaboration with GlaxoSmithKline, as are the diabetes and Alzheimer's drugs.

"Management focused the call on talking up Human Genome Sciences' value to an acquirer," said Cowen and Co. analyst Eric Schmidt.

In a separate conference call, GlaxoSmithKline CEO Andrew Witty said his company's offer was fair.

"We think we've made a very full offer for HGS," he said. "We know this company probably better than anyone else, except the people who run HGS today," he said.

At the time, GlaxoSmithKline was offering an 81 percent premium to the latest closing price of Human Genome Science shares. BMO Capital Markets analyst Jim Birchenough said the GlaxoSmithKline offer now represents a minimum bid for the company. He raised his price target on Human Genome to $17 per share from $14.

Human Genome Sciences stock slid 27 cents $14.37 in afternoon trading, indicating investors expect a greater offer from GlaxoSmithKline or another company.

GlaxoSmithKline reported disappointing first-quarter results Wednesday, and its U.S. shares lots $1.32, or 2.8 percent, to $45.89 in afternoon trading.