Human Genome Sciences saw a third of the value wiped off its shares yesterday after its drug for systemic lupus erythematosus, a chronic inflammatory disease which affects joints, muscles and other parts of the body, failed to show efficacy in a Phase II clinical trial.

But HGS insisted the results do not spell the end of the drug, called Lymphostat-B (belimumab), and it maintained that the data support pressing ahead with a Phase III trial in patients with SLE, although it will consult with regulators and the trial investigators before making a final decision. Lymphostat-B is also in development for rheumatoid arthritis and was licensed to UK-headquartered drugmaker, GlaxoSmithKline, in July as part of a long-standing collaboration between the two companies [[19/08/05c]] [[08/07/05c]].

The results showed that, while Lymphostat-B did not meet the objective of a reduction in signs and symptoms of SLE at 24 weeks, it did show a statistically significant improvement in a subset of patients, representing about 75% of the total study population, after 52 weeks.

Investors concentrated on the top-line message though, and HGS’ shares fell just under 30% to $9.87 at the close of trading yesterday, while GSK’s US stock also dipped half a point to $50.95.

Analysts said the main downside of the results was that a single Phase III trial would now likely be insufficient evidence to support approval, as had been hoped, so HGS and GSK may well have to invest in two pivotal trials if they want to take the project further.

On the plus side, the lack of effective treatments for SLE - no drug has been approved to treat the disease for 40 years - means that a drug that could show even modest benefits might make it through the regulatory review process, and could achieve significant sales. But HGS and GSK face competition from Genentech and Biogen Idec, which are developing their already-marketed rheumatoid arthritis drug Rituxan (rituximab) for SLE [[01/09/05f]], and have already taken it into Phase III for this indication.