- The Washington Times - Monday, November 22, 2004

Human Genome Sciences’ stock value rose 3 percent yesterday on news that the Rockville company has appointed a new chief executive officer.

The biotech company is trying to position itself for its first drug sales after 12 years of scientific achievement but no products on the market.

Company founder William Haseltine, the former chairman and chief executive officer, announced his retirement Oct. 17.

He will be replaced by H. Thomas Watkins, a 20-year veteran of Abbott Laboratories and its affiliates.

“I think it’s a positive for the company,” said Matt Geller, biotech analyst for Wall Street financial firm CIBC World Markets. “If they can get their costs under control, and they can focus on their most promising products, then they can be a successful company.”

Human Genome Sciences’ stock rose 28 cents to close at $10.75 per share on the Nasdaq Stock Market.

The new and outgoing chief executives have different backgrounds.

Mr. Haseltine is a scientist who helped pioneer development of drugs to target specific genes involved in illness. Mr. Watkins is a businessman who has not worked in a laboratory but is know for pushing growth.

He starts his job with Human Genome Sciences at a time when it has won respect from the scientific community but never has earned a profit.

The company announced a third-quarter loss in October of $62.2 million (48 cents per share) compared with a $47.7 million loss (37 cents) a year earlier. The company cited costs from consolidating locations and the retirement of Mr. Haseltine as contributing issues. The company lost $185.3 million last year.

Mr. Watkins said he was chosen by Human Genome Sciences’ board for his experience in commercializing technology products. He said he wants to learn more about the company before making any changes.

“I don’t know that we’re going to make any changes in the direction the company is currently pursuing,” he said.

The company laid off 200 employees in March, and is left with about 900.

Mr. Watkins is expected to emphasize the same kind of rapid product development and efficiency that helped Abbott affiliate TAP Pharmaceutical Products Inc. double annual revenue from $2 billion to about $4 billion. He was the company’s chief executive officer from 1998 until this year.

He led TAP Pharmaceutical when it pleaded guilty in 2001 to fraud after a marketing scheme involving a prostate cancer drug that led to an $875 million penalty. Mr. Watkins was not implicated in the charges.

“The settlement was reached, and he kind of cleaned it up on his watch,” said Jerry Parrott, spokesman for Human Genome Sciences. “All of those issues predated him.”

Human Genome Sciences is well-positioned for growth as some drugs it developed approach the end of required clinical trials, analysts said.

Last month, pharmaceutical giant GlaxoSmithKline PLC purchased the rights to develop and commercialize Albugon, a diabetes treatment. Human Genome Sciences also is in second-phase testing for drugs to treat hepatitis C and several types of lung cancer.

Other trials are under way to treat rheumatoid arthritis and lupus.

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