Human Genome Sciences Prices $430 Million Convertible Notes Issuance

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ROCKVILLE, Md.--(BUSINESS WIRE)-- Human Genome Sciences, Inc. (Nasdaq: HGSI) today announced that it has priced an underwritten public offering of $430 million aggregate principal amount of Convertible Senior Notes due 2018, which was upsized from the previously announced $400 million offering. Citigroup is acting as the underwriter. The underwriter has the option to purchase up to an additional $64.5 million aggregate principal amount of notes from the company, within 30 days. The offering is expected to close on November 7, 2011, subject to customary closing conditions.

The notes will be the company’s general unsecured senior obligations. The notes will pay interest semi-annually on May 15 and November 15, beginning on May 15, 2012, at a rate of 3.00% per year, and will mature on November 15, 2018.

Prior to August 15, 2018, the notes will be convertible only upon specified events and during specified periods and, thereafter, at any time until the business day preceding the maturity of the notes. The notes will initially be convertible at a conversion rate of 75.0469 shares of the company’s common stock per $1,000 principal amount of notes, corresponding to an initial conversion price of approximately $13.33 per share of common stock, or 30% above the last reported sale price of $10.25 per share of the company’s common stock on the Nasdaq Global Select Market on November 1, 2011. The conversion rate will be subject to adjustment upon certain events, but will not be adjusted for accrued and unpaid interest. Upon conversion, the company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the company’s election.

In connection with the offering, the company intends to enter into capped call transactions with certain counterparties (the “counterparties”). The capped call transactions are intended to reduce the potential dilution to the company’s common stock and/or offset any potential cash payments in excess of the principal amount of the converted notes, as the case may be, in connection with conversion of the notes, up to a stock price of approximately $18.45 per share, which is the initial cap on the counterparties’ share delivery and/or cash payment obligation under the capped call transactions. If the market value of the company’s common stock exceeds the cap specified in the capped call transactions, the settlement amount the company receives under such transactions will be capped, and the anti-dilutive and/or offsetting effect of the capped call transactions will be limited.

The company intends to use the net proceeds from this offering for general corporate purposes, which may include repurchases of the company’s outstanding 2 ¼% Convertible Subordinated Notes due 2012 before their scheduled maturity date on August 15, 2012, or repayment of the 2012 Notes at maturity, unless they are converted into the company’s common stock. In addition, the company intends to use a portion of the net proceeds of the offering to fund the cost of the capped call transactions with the counterparties. If the underwriter exercises its option to purchase additional notes, the company may use a portion of the net proceeds from the sale of such additional notes to fund the additional cost of entering into additional capped call transactions with the hedge counterparties.

In connection with establishing its initial hedge of the capped call transactions, the company expects that the counterparties or their affiliates will enter into various over-the-counter cash-settled derivative transactions with respect to the company’s common stock concurrently with, or shortly following, the pricing of the notes and may unwind all or a portion of the over-the-counter cash-settled derivative transactions with respect to the company’s common stock and/or purchase shares of the company’s common stock in open market transactions and/or privately negotiated transactions shortly following the pricing of the notes. In addition, the counterparties or their affiliates may modify their hedge positions following pricing of the notes from time to time by entering into or unwinding various over-the-counter derivative transactions with respect to shares of the company’s common stock, and/or by purchasing or selling shares of the company’s common stock or the notes in secondary market transactions and/or privately negotiated transactions (and is likely to do so during any observation period relating to a conversion of the notes). The effect, including the direction and magnitude of the effect, if any, of these transactions and activities on the market price of the company’s common stock or the notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the ability to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of the notes, the number of shares of the company’s common stock and/or the amount of cash that may be received upon conversion of the notes.

The notes will be issued pursuant to an effective shelf registration statement that was previously filed with the Securities and Exchange Commission and became effective immediately upon filing on October 29, 2009. The offering is being made by means of a prospectus supplement and related base prospectus. Copies of the prospectus supplement and related base prospectus for the offering may be obtained by contacting Citigroup Global Markets, Inc. at Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220, telephone number (800) 831-9146 or email at [email protected].

This press release is for informational purposes only and is not an offer to sell or a solicitation of an offer to sell any security of the company, nor will there be any sale of such security in any jurisdiction in which such offer, sale or solicitation would be unlawful. The offering may be made only be means of a prospectus supplement and related base prospectus.

About Human Genome Sciences

Human Genome Sciences exists to place new therapies into the hands of those battling serious disease.

HGS, Human Genome Sciences and BENLYSTA are trademarks of Human Genome Sciences, Inc.

Safe Harbor Statement

This announcement includes statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include those expectations regarding the offering of notes and our use of net proceeds. These forward-looking statements are based on our current intentions, beliefs and expectations regarding future events. We cannot guarantee that any forward-looking statement will be accurate. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from our expectations. Investors are, therefore, cautioned not to place undue reliance on any forward-looking statement. Any forward-looking statement speaks only as of the date of this announcement, and, except as required by law, we do not undertake to update any forward-looking statement to reflect new information, events or circumstances.

Some important factors that could cause our actual results to differ from our expectations in these forward-looking statements include: our lack of commercial experience and dependence on the sales growth of BENLYSTA; any failure to commercialize BENLYSTA successfully; the occurrence of adverse safety events with our products; changes in the availability of reimbursement for BENLYSTA; the inherent uncertainty of the timing, success of, and expense associated with, research, development, regulatory approval and commercialization of our pipeline products and new indications for existing products; substantial competition in our industry, including from branded and generic products; the highly regulated nature of our business; uncertainty regarding our intellectual property rights and those of others; the ability to manufacture at appropriate scale, and in compliance with regulatory requirements, to meet market demand for our products; our substantial indebtedness and lease obligations; our dependence on collaborations over which we may not always have full control; foreign exchange rate valuations and fluctuations; the impact of our acquisitions and strategic transactions; changes in the health care industry in the U.S. and other countries, including government laws and regulations relating to sales and promotion, reimbursement and pricing generally; significant litigation adverse to the company, including product liability and patent infringement claims; our ability to attract and retain key personnel; and increased scrutiny of the health care industry by government agencies and state attorneys general resulting in investigations and prosecutions.

The foregoing list sets forth many, but not all, of the factors that could cause actual results to differ from our expectations in any forward-looking statement. Investors should consider this cautionary statement, as well as the risk factors identified in our periodic reports filed with the SEC and the prospectus supplement and related base prospectus, when evaluating our forward-looking statements.

Human Genome Sciences, Inc.Media Contacts:Susannah BudingtonDirector, Corporate Public Relations301-545-1062orJerry ParrottVice President, Corporate Communications301-315-2777orInvestor Contacts:Claudine Prowse, Ph.D.Executive Director, Investor Relations301-315-1785orPeter VozzoSenior Director, Investor Relations301-251-6003

Source: Human Genome Sciences, Inc.

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