Shares in Human Genome Sciences Inc. roared into record territory yesterday after the company said it landed a patent on a gene that regulates a key doorway that the AIDS virus uses to infect cells. But one of the nation's leading AIDS researchers said Human Genome might have a patent fight on its hands.
Yesterday, shares in the Rockville-based biotechnology firm gained $33.25 -- 21.5 percent -- to close at $188.
Remarkably, Human Genome has seen its stock price nearly double since a 2-for-1 stock split Jan. 31.
Despite Wall Street's enthusiasm, Dr. Robert C. Gallo, co-discoverer of the human immunodeficiency virus, said yesterday that he believes the patent might be challenged because so many other researchers had played key roles in uncovering how the AIDS virus enters and infects immune system cells.
"This gives no recognition to the important discoveries made prior to their filing," said Gallo, head of the Institute of Human Virology at the University of Maryland, Baltimore.
At issue could be millions of dollars in fees that drug researchers and developers potentially would have to pay Human Genome now that it has the patent.
The debate was touched off by the company's announcement yesterday that it had received U.S. patent protection on a gene that controls development of the CCR5 receptor. Receptors are on the surface of cells and serve as "docking stations" for naturally occurring proteins, chemicals and even viruses.
In 1995, Gallo's research team was the first to determine that chemical messengers in the body, called chemokines, play a crucial role in blocking HIV from entering cells.
The next year, National Institutes of Health researchers used that discovery to determine that the CCR5 receptor is a key entry point for HIV into cells.
"By 1997 all kinds of people were pursuing chemokines and CCR5 as targets for AIDS treatments," said Gallo, whose institute is among those trying to develop drugs that interfere with HIV's ability to infect cells using the CCR5 receptor.
Gallo predicted the patent could have a chilling effect on people working in the field, fearful that their investment in years of labor might be at risk.
"There's a real question that should be raised by this kind of patent filing. There are some pretty broad implications" for researchers and other companies already working on drugs targeting the doorway, Gallo said.
But company executives said yesterday that they do not intend to bar others from moving ahead on developing AIDS treatments that target CCR5.
'Work with others'
"We won't impede others from developing any drug," said Dr. Craig A. Rosen, executive vice president for research and development at Human Genome.
"Our strategy is to work with others and hopefully encourage advancements," he said. "But the fact remains we cloned this gene and said it was a viral receptor before anybody else."
That means, he said, any academic institution, pharmaceutical company or biotechnology firm that successfully develops a drug that targets CCR5 to block HIV would likely need to negotiate a royalty payment agreement with Human Genome before marketing the drug or face a patent fight.
A new trading high
The issue didn't dissuade Wall Street yesterday.
Human Genome shares jumped to $194 within the first half-hour of trading and then crested at $205.4375, a new trading high.
On Jan. 28, the last trading day before the 2-for-1 split, shares closed at $191.125.
Since the split, shares have soared as investors continue to clamor for stakes in biotechnology companies at the forefront of the genomics revolution, which analysts say will lead the way to significant new drugs. Human Genome's announcement touched off a surge in gene research company stocks yesterday.
"We think this gene could be used to develop drugs that block interaction with the receptor," Rosen said. "This is a great example of how genomics will play a vital role in drug development in the future."
In recent years, pharmaceutical companies have developed an increasing array of drugs that block interactions with receptors as a way to treat conditions including allergies, stomach ulcers and migraine headaches.
"The pharmaceutical companies already know how to use these receptors to develop very effective drugs," Rosen said. "We think it's a pretty good bet that at some point one of them will do that with this one."
Agreements in place
Rosen said several pharmaceutical companies that had licensing agreements in place with Human Genome before the patent award are using the CCR5 gene information to try to develop new drugs, but none is close to human studies.
The only one he would identify was Praecis Pharmaceuticals Inc. of Cambridge, Mass., a young company with which Human Genome struck a research-and-development deal this month. Among the targets Praecis plans to pursue are new AIDS therapies based on the CCR5 gene.
Rosen said Human Genome has launched its own program to use the CCR5 gene information to develop antibody-based treatments for HIV.
The market for new treatments for AIDS and AIDS-related disorders is potentially large.
Worldwide more than 33 million people are estimated to be infected with the virus that causes acquired immune deficiency syndrome -- the majority of them in Africa and other developing countries that lack strong health care.