Although the two trial designs are similar, the total duration of the studies will differ, at 76 weeks for BLISS-76 and 52 weeks for BLISS-52. The data from BLISS-76 will be analyzed after 52 weeks in support of a potential Biologics License Application (BLA). The phase III trial protocols were agreed upon with FDA by Special Protocol Assessment. In each of the two phase III trials, approximately 810 patients will be enrolled and randomized to 1 of 3 treatment groups (1 mg/kg BENLYSTA, 10 mg/kg BENLYSTA, or placebo). Patients will be dosed intravenously on Days 0, 14 and 28, then every 28 days for the duration of the study.

The FDA has provided a Special Protocol Assessment (SPA) agreeing to the BENLYSTA phase III clinical development program in patients with active SLE. Agreement has also been received from the European Agency for the Evaluation of Medicinal Products (EMEA) on the major components of the BENLYSTA phase III clinical development program, including the primary efficacy endpoint measures, target patient population, and dose selection.

HGS has completed the enrollment and initial dosing of 826 patients in BLISS-76 in August 2008. The company completed randomization and initial dosing of 867 patients in BLISS-52 in April 2008. Data from BLISS-52 and BLISS-76 are expected in July 2009 and November 2009 respectively. It is anticipated that a BLA will be filed in the US in 1H10.

Both Albuferon and Benlysta have the potential to become blockbusters, but we see Benlysta (formerly LymphoStat B) as a higher risk program.

We believe the risk/reward is balanced for HGSI at this point. Therefore, we maintain a Hold rating for HGSI. Our six-month price target is $3.50.