UPDATE 3-Human Genome lupus drug draws questions; stock off

By Lisa Richwine WASHINGTON, Nov 12 (Reuters) - U.S. drug reviewers asked if the benefits of a long-awaited Human Genome Sciences Inc lupus drug outweighed concerns about suicide and other possible risks, but analysts said they still expected approval. The company's shares fell 9 percent after the Food and Drug Administration released a preliminary review of the drug, Benlysta, on Friday. If approved, Benlysta would be the first medicine cleared for fighting the debilitating autoimmune disease in a half-century. Annual global sales are forecast at $2.2 billion by 2014, according to Thomson Reuters. That would transform unprofitable biotech Human Genome, which will split Benlysta profits with partner GlaxoSmithKline , into an industry star. FDA staff said they would ask an advisory panel, set to meet on Tuesday, if company findings provided a strong enough benefit to justify potential risks.

A final FDA ruling is due by Dec. 9. (For a graphic on how prospects for Benlysta have affected Human Genome shares, click on http://r.reuters.com/sed35q.) "Various analyses of the data raise questions about the robustness of the efficacy findings," FDA staff wrote in a summary prepared for the panel. Safety issues that need discussion include deaths, cancers, infections and suicide, the FDA reviewers said. While lupus patients are known to have a higher suicide risk, cases were higher with Benlysta in clinical studies. FDA staff pointed to three suicides among Benlysta patients in company studies and none with a placebo. "If belimumab only has a modest effect for some patients and manifestations, is a possible increased risk of death, infection, or neuropsychiatric adverse effects worth the potential benefit?" FDA reviewers wrote, using Benlysta's generic name. Christopher Raymond, an analyst with Robert Baird & Co, urged investors to buy on weakness in Human Genome shares. The FDA typically puts a drug "under a microscope to encourage rigorous debate," and "timely approval" is still expected, Raymond said in a research note. Mark Schoenebaum, an analyst with ISI Group, said in a research note he still expects the advisory panel to recommend approval of Benlysta. He said there was "nothing surprising" in the FDA review other than the suicide issue. Collins Stewart analyst Salveen Richter said the FDA review showed the agency recognized the need for new lupus treatments. "However, given the marginal efficacy of the drug, they're weighing the safety profile," Richter said. "We still think, given the unmet need, that there's a high likelihood it gets approved," Richter said. Richter predicts the drug will eventually garner peak global sales of at least $4 billion. BENLYSTA FOUND TO EASE SYMPTOMS Lupus causes the immune system to attack the body's own tissue and organs, leading to arthritis, kidney damage, chest pain, fatigue, skin rash and other problems. An estimated 5 million people worldwide have the disease, and many cannot find relief with current drugs or suffer harsh side effects such as severe bone loss from steroids. FDA reviewers agreed Benlysta eased symptoms in more patients than a placebo but said the drug did not help the organs most likely to cause poor outcomes and deaths. They also noted a "seemingly slow onset of response and lack of durability of the response." Studies also showed "a lack of demonstrated efficacy" in black patients, who are more likely to face an aggressive case of lupus, FDA staff said. Benlysta is given once a month by intravenous infusion. Analysts expect the drug will cost a patient between $15,000 and $30,000 annually, a price tag in line with biotech medicines for other autoimmune diseases. The drug is designed to inhibit BLyS, a protein in the body that exists to keep B-cells functioning normally. B-cells make antibodies that prevent infection. In lupus patients, B-cells are overstimulated and make antibodies that attack the body. Medicines like Benlysta "offer the hope of potentially reversing the course of active (lupus) disease and may provide new alternatives to reduce symptoms and limit tissue damage," Human Genome said in a summary released by the FDA. Human Genome shares have risen sharply, from less 50 cents in March 2009 before the first encouraging Benlysta findings were released. On Friday, the shares were down 9 percent at $24.08 on Nasdaq, while GlaxoSmithKline shares slipped 0.5 percent in London. (Additional reporting by Lewis Krauskopf and Susan Heavey; Editing by Phil Berlowitz, Derek Caney and John Wallace) ((lisa.richwine@thomsonreuters.com +1 202 310-5691; Reuters Messaging: lisa.richwine.reuters.com@reuters.net)) Keywords: HUMANGENOME LUPUS/ (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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