There are literally hundreds of new drugs hitting the market each year. Why write about this particular drug? The drug bears discussion because it is the first one in 50 years to treat a disease called Lupus. Lupus is an autoimmune disease in which the immune system turns against part of the body it is designated to protect. It causes debilitating joint pain, organ damage and skin rashes. Up to now the key medication used to treat Lupus are steroids.

A team of researchers from Human Genome Sciences (HGSI) headed by William Haseltine started looking at genes and their special functions. The problem was that there was no gene known to cause Lupus. So they started thinking outside the box. Instead of finding the gene first and then its function, they looked for the function then found the gene called BLyS that is elevated in Lupus. The new drug is called Benlysta.

Human Genome Sciences (HGSI - option chain) stock is trading lower today after briefing materials for an FDA advisory panel were released that questioned whether the benefits of Benlysta, a proposed lupus treatment from HGSI and GlaxoSmithKline (GSK), outweighed its risks. The panel will potentially vote next week on whether it thinks Benlysta should be approved, but its early skepticism might not be a good sign for HGSI and GSK and speculation surrounding the event has driven option prices through the sky. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on HGSI.

Human Genome Sciences (HGSI) slipped into the red right out of the gate Wednesday morning, as traders reacted to the company's latest round of clinical drug data. HGSI said that its experimental lung cancer drug, mapatumumab, was well-tolerated by patients in a study, but the drug fared no better than a placebo in disease response or progression-free survival.

Full results of the study will be presented "at an appropriate scientific meeting later in 2010," according to a company release.

Just as President Obama lifted the executive order banning the use of embryonic stem cells for research, Roche and Genentech (NYSE: DNA) appear to have reached an agreement on Roche's bid to acquire the 44% of DNA that Roche does not currently own.

Shares of biotech companies engaged in stem cell protocols rallied after the Obama announcement. While most of these companies are small in size with stock prices below $2 per share, the announcement gave impetus to price increases of 17% to 100%.