Human Genome Sciences, Inc. has signed an exclusive worldwide licensing agreement with Novartis for the development and commercialization of Albuferon for chronic hepatitis C and all other uses. The two companies will commercialize Albuferon in the U.S. and will share the commercialization costs and profits.

Novartis will be responsible for commercialization outside the U.S. and will pay HGS a royalty on those sales. HGS and Novartis will share clinical development costs. HGS will receive an upfront fee of $45 million. Clinical development, commercial milestone and other payments to HGS could total as much as $507.5 million, including $47.5 million when the first patient is dosed in a Phase III trial. HGS expects to initiate Phase III development of Albuferon by the end of 2006. HGS will have primary responsibility for the bulk manufacture of Albuferon.

“This agreement brings the strengths of a global leader in the pharmaceutical industry to the development and commercialization of Albuferon, a product that could become the best-in-class immunomodulator in treatment regimens for chronic hepatitis C,” said H. Thomas Watkins, president and chief executive officer of HGS. “Novartis has demonstrated its commitment to leadership in infectious diseases, and we look forward to working closely together to advance Albuferon rapidly to the market. This collaboration is a significant step forward in our company’s progress toward commercialization.”