By Chris Coyle
May 31, 2000

Anyone watching CNBC's Market Week with Maria Bartiromo this weekend caught an interview with William Haseltine, CEO of Human Genome Sciences (NASDAQ: HGSI). For our readers who have been with us for awhile, you know Human Genome Sciences is a holding in our StockChamp Portfolio. In case you missed it, I will have the interview below for your reading pleasure. The interview provided good information on the company and how they see themselves in the future. You definitely should read this if you are a shareholder in the company or if you are thinking of becoming a shareholder in HGSI.

So here it is, uncut, exactly like it was said on CNBC. To save my own legal butt, I assume that CNBC owns a copyright on this interview.

A little prelude first, eh? The stock price of Human Genome is discussed first, with the stock seeing a high of 232 (we bought at 201). Maria Bartiromo mentions the Clinton-Blair speech that gene research should be "made freely available to scientists everywhere" and how this affected the stock price of Human Genome.

She goes into some competitive advantages of the company. Three main ones were discussed:

1. 128 patents; 7,500 applications
2. $925 million in cash
3. Three drugs in clinical trials; more in 2000

With that, we start the interview.

Haseltine: This is a great industry. I think overall, it's undervalued. You can add up all the biotech companies, and doesn't even equal the value of one of these big pharmaceutical companies, yet our industry is producing more drug candidates that the entire pharmaceutical industry combined.

Bartiromo: Does it bother you that the market seems to react so dramatically to any perceived setback in any of the trials?

Haseltine: We have a very healthy, we have a very bold market, and I'm very pleased that we have that; we take advantage of that. As you know, the biotech sector was red-hot. What did we do when it was red-hot? We raised a lot of money, over 850 million dollars. Our burn rate last year was 45 million dollars. We have many years of cash now to support our business. So, I am the last person who will criticize this market.

Bartiromo: You're revolving, eventually, into a pharmaceutical maker.

Haseltine: That's right.

Bartiromo: Will that threaten the relationships that you have right now with the large pharmaceuticals companies basically paying you for the research and data?

Haseltine: Would it dampen revenues if those relationships broke down. I don't think it would, because they have the right to sell our products. We have the right to sell their products. One of our partners, SmithKline Beecham (NYSE: SBH) is publicly announced, in the pages of "Business Week" for example, that they think that they'll have two genomics-derived chemical drugs in the human clinical trials this year. Mind you, we have the possibility to get up to 28% of their sales, if we are willing to sell that drug along with them. That's a pretty big piece.

Bartiromo: What was your view of the Clinton-Tony Blair statement that gene research should be available in the public domain as opposed to private property?

Haseltine: Well, the first time I read it, like everybody else, I was kind of shocked. What the heck are these guys doing? But when you read it more closely, you actually see that they had some very good intentions. In that statement, there is the strongest, and I think the only statement by the United States President and the Prime Minister of Great Britain in favor of patents. It actually says, "We think that gene-based inventions are going to be important for the future of medicine."

Bartiromo: One of the analysts brought up a comment that perhaps you locked up all of the patents unfairly early on.

Haseltine: Unfairly, no; all, no; many, yes. (Editor's note: Short and sweet, wouldn't ya say!)

Bartiromo: What about the year 2000 and Human Genome? What kind of progress are you looking for?

Haseltine: Well, we've already had a great year. Because for the first time, this whole new paradigm of drug discovery has seen some validation. The first controlled clinical trial of a genomics-derived drug was successful. We announced that just a couple days ago. That's the real milestone.

And that is the end of the interview.

After the interview, Maria Bartiromo mentioned a comment William Haseltine told her that one of HGSI's products, BLyS, is expected to enter phase I clinical trials in the next few weeks.

BLyS (B Lymphocyte Stimulator) is a human protein that "stimulates the body's immune system to produce antibodies." Human Genome says this drug has the possiblity to treat many diseases involving the immune system, including AIDS and certain forms of cancer.

Well, that's about it. I hope the interview helped you if you are researching the company for possible investment. I thought it to be a good interview that better helped me to understand the goals of the company in the future.

Later this week, I plan on having the second segment of Human Genome on the site when Maria Bartiromo interviews Faraz Naqui, portfolio manager of the Dresdner RCM Biotech Fund.

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