Down 20%: Benylsta Not Ramping Fast Enough

Sales of Human Genome Sciences' (NAS: HGSI) new lupus drug Benylsta continues to grow -- just not fast enough to keep investors interest. The stock traded down more than 20% today after net sales came in at $18.8 million, compared with $7.8 million last quarter.

While Dendreon (NAS: DNDN) and other companies that have launched drugs recently would love to see 141% quarter-over-quarter growth, the low base Human Genome is working from makes the growth less than impressive. If you look at gross sales, the number jumps to $21.3 million, but that's still a far cry from a blockbuster.

That's the bad news. And probably deserving of the haircut investors gave the stock today.

But it seems there's still plenty of potential in Benlysta. Human Genome Sciences claims that 90% of rheumatologists -- doctors who treat lupus and other autoimmune diseases -- have used or intend to use Benlysta in their practice.

The problem is that 90% of potential patients aren't getting the drug. Not even close. If they do, Human Genome Sciences and its marketing partner GlaxoSmithKline (NYS: GSK) would certainly have a blockbuster on their hands.

Clearly, the companies need to move doctors from the "intend to use" to the "have used" column. Throwing more marketing money at the problem might get doctors to try it.

But the bigger problem is that most doctors seem to be prescribing Benlysta for only a subset of their patients. Lupus is a disease that waxes and wanes, and Benlysta would be used only when the symptoms hit a moderate level, so not every patient would get the drug. But it still appears that doctors are taking a wait-and-see attitude, prescribing it for a few patients -- perhaps those who come in and ask for it -- and then waiting to see how they react to the drug.

Human Genome Sciences and Glaxo are just going to have to wait until doctors to finish their wait-and-see period. If you have the time, Human Genome Sciences could be a good investment at these knocked-down prices. With its market cap of less than $2 billion, there aren't nearly as many sales baked in as there were a few months ago.

Follow Human Genome Sciences as it tries to jumpstart Benlysta sales. Add it toMy Watchlist, which will help you keep track of all our Foolish analysis on Human Genome Sciences.

At the time thisarticle was published Fool contributorBrian Orelliholds no position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Dendreon.Motley Fool newsletter serviceshave recommended buying shares of GlaxoSmithKline. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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