Shares of drug developer Human Genome Sciences Inc. plummeted to nearly half Monday as the company’s results for the developing hepatitis C drug Albuferon in a late-stage trial, failed to show numerically better efficacy compared to standard-of-care.

The shares dropped 76 cents, or 45 percent crashing to an all-time low in at least 10 years of 80 cents to recover and move up to 94 cents in midday trading on Nasdaq.

The drug Albuferon was reported to have met its treatment goal of working as well as a current drug in a late-stage study by the Rockville, Md.-based company. In the study called ACHIEVE 1, 900-micrograms of Albuferon given every two weeks prompted a sustained response rate in 48.2 % of patients while Roche's Pegasys prompted a response in 51 % of the patients. The company said the rate of SVR among the two groups "was comparable."

Although these figures showed Albuferon to be statistically as effective as weekly Pegasys, which was the study goal, analysts were keen on better results in order to compete not only with Pegasys but also with Schering-Plough Corp.'s Pegintron.

Analysts had hoped the drug apart from meeting its goal of non-inferiority compared to Pegasys would also show numerically better sustained virologic response (SVR) rates to convince the market of the drug's commercial viability.

Piper Jaffray analyst Edward A. Tenthoff said, "SVR rate is the key prescribing criteria (for physicians). With a numerically inferior SVR rate, Albuferon will have difficulty unseating market leader Pegasys."

He still expects approval in the second half of 2010, but has lowered expectations for how well the drug will sell. "We project Human Genome has sufficient cash to reach Albuferon approval next year. However, we believe the debt will remain an overhang and negatively impacts our cash flow projection," Tenthoff added.

He cut his rating to "Neutral" from "Buy" and slashed his price target to $1.70 from $6. He said the drug's sole benefit is now less frequent dosing.

In a note to investors he said, "We believe with a numerically inferior sustained virus response rate, Albuferon will have difficulty unseating market leader Pegasys. This means that you have a drug that is statistically comparable but for the vast majority of prescribers who have used Pegasys forever, they are not going to change their prescribing trends based on this data," he added.

Leerink Swann's Joseph Schwartz said the higher rate of pulmonary adverse events and discontinuations in albuferon may limit its ability to take market share from Pegasys.

Human Genome is developing Albuferon in partnership with Swiss drugmaker Novartis under an agreement signed in June 2006 and the company expects to file for marketing approvals globally in the fall of 2009.