UNITED
    STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
    For the fiscal year ended December 31,
    2009
  Commission File Number 001-14169
 HUMAN GENOME SCIENCES,
    INC.
 (Exact name of
    registrant)
  Delaware(State of
    organization)

22-3178468(I.R.S. employer
    identification number)  14200 Shady Grove Road, Rockville, Maryland
    20850-7464 (address of principal
    executive offices and zip code)
  (301) 309-8504
    (Registrants telephone number)
  Securities registered pursuant to Section 12(b) of the
    Act:
   Title of Each Class

Name of Each Exchange on Which RegisteredCommon stock, par value $0.01 per share

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
    None
  þ o
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
    *
    Excludes 24,897,966 shares of common stock deemed to be
    held by officers and directors and stockholders whose ownership
    exceeds five percent of the shares outstanding at June 30,
    2009. Exclusion of shares held by any person should not be
    construed to indicate that such person possesses the power,
    direct or indirect, to direct or cause the direction of the
    management or policies of the registrant, or that such person is
    controlled by or under common control with the registrant.




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PART I
  ITEM 1.
    BUSINESS  This annual report on
    Form 10-K
    contains forward-looking statements, within the meaning of the
    Securities Exchange Act of 1934 and the Securities Act of 1933,
    that involve risks and uncertainties. In some cases,
    forward-looking statements are identified by words such as
    believe, anticipate, expect,
    intend, plan, will,
    may and similar expressions. You should not place
    undue reliance on these forward-looking statements, which speak
    only as of the date of this report. All of these forward-looking
    statements are based on information available to us at this
    time, and we assume no obligation to update any of these
    statements. Actual results could differ from those projected in
    these forward-looking statements as a result of many factors,
    including those identified in Risk Factors,
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations and elsewhere. We urge
    you to review and consider the various disclosures made by us in
    this report, and those detailed from time to time in our filings
    with the Securities and Exchange Commission, that attempt to
    advise you of the risks and factors that may affect our future
    results.
  Overview
  tm tm
  ®
    ®
   1




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20850-7464. (301) 309-8504. Form 10-K.
  Strategy
    
    Continue to accelerate the development and commercialization
    of our late-stage products.  Our priority focus is
    on completing clinical development, obtaining regulatory
    approvals, and preparing for the global launch and
    commercialization of BENLYSTA and ZALBIN.
    Build strong partnerships with global leaders in the
    pharmaceutical industry.  The co-development and
    commercialization agreements we have in place with GSK for
    BENLYSTA and Novartis for ZALBIN could help HGS assure that
    these products achieve their full therapeutic and commercial
    potential. As our earlier-stage products continue to progress,
    we will consider each individually to assess whether similar
    collaborations are strategically beneficial.
    Ensure sustainable growth into the future by continuing to
    invest in our mid- and early-stage clinical
    pipeline.  We have taken a number of actions to
    strengthen our oncology program. Three randomized chemotherapy
    combination trials of our TRAIL receptor antibody mapatumumab
    (HGS-ETR1) are currently ongoing to evaluate its potential in
    the treatment of specific cancers, including non-small cell lung
    cancer, multiple myeloma and hepatocellular cancer. In November
    2009, we initiated a Phase 1 trial of our lead IAP inhibitor
    HGS1029 as monotherapy in patients with advanced lymphoid
    tumors. HGS1029 as monotherapy is also being studied in an
    ongoing Phase 1 study initiated in 2008 in patients with
    advanced solid tumors. Our novel small-molecule inhibitors of
    IAP proteins show early promise in the treatment of a number of
    cancers, and we plan to continue the study of HGS1029 both alone
    and in combination with other anti-cancer agents, including
    mapatumumab. We will remain opportunistic in our search for new
    product candidates, assessing the best of the therapeutic
    opportunities discovered by HGS alongside therapeutic
    opportunities discovered by other organizations.
    Pursue strategic acquisitions and
    collaborations.  We will pursue strategic
    acquisitions and collaborations to augment our capabilities,
    provide access to complementary technologies, and expand our
    portfolio of new drug candidates. We also rely on collaborations
    for the development of certain products discovered by HGS 2




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or others based on our technology, including those to which we
    have substantial financial rights in the GSK clinical pipeline.
    In addition, we are engaging in collaborations to leverage our
    extensive capabilities in protein and antibody process
    development and manufacturing to produce near-term revenue.  
    Capitalize on our intellectual property
    portfolio.  We pursue patents to protect our
    intellectual property and have developed a significant
    intellectual property portfolio, with hundreds of issued
    U.S. patents covering genes, proteins, antibodies and
    proprietary technologies. We have also filed U.S. patent
    applications covering many additional discoveries and
    inventions. We will seek opportunities to monetize intellectual
    property assets that we do not plan to develop ourselves
    internally.
    Maintain a strong cash position.  HGS has cash
    resources in place that allow us to maintain a priority focus on
    advancing our late-stage products to commercialization, while
    also exploring longer-term opportunities that will drive
    momentum beyond our lead products. While we expect net cash burn
    in 2010 to increase as we prepare for commercialization,
    controlling net cash burn and maintaining a strong cash position
    will continue to be an important ongoing priority.  Products
    Clinical
    Programs
  Late-Stage
    Products
    BENLYSTA
    (belimumab)
  ®
     3




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ZALBIN
    (albinterferon alfa-2b)
      and/or
  800-mg
  Raxibacumab
  Bacillus anthracis
   4




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The New England Journal
    of Medicine
  Oncology
    Products
    Mapatumumab
    (HGS-ETR1)
  proof-of-concept
  Non-small cell lung cancer: 75-80%
  Multiple myeloma: time-to-progression
  Hepatocellular cancer: 80-90%
  IAP
    Inhibitors
     5




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Products
    in the GSK Pipeline
    Darapladib
  2
    Syncria
    (albiglutide)
  GLP-1
    Research
    and Development
    Human
    Antibody Technology
     6




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Albumin-Fusion
    Technology
      Drug
    Development
    
    Clinical Research and Biostatistics.  The
    clinical research and biostatistics groups are responsible for
    the design, planning and analysis of clinical trials.
    Clinical Operations.  The clinical operations
    group executes clinical trials and is responsible for managing
    clinical trial sites and ensuring that all proper procedures are
    followed during the collection of clinical data. The group
    includes our data management team.
    Project Management.  Our project management
    team oversees the process of development of a drug from the
    earliest stages of research through the conduct of clinical
    development and regulatory filings.
    Regulatory Affairs.  The regulatory affairs
    group manages communications with and submissions to regulatory
    authorities.
    Drug Safety.  As our products advance in
    clinical testing, our drug safety group collects and analyzes
    information on drug experience and safety, and ensures that
    accurate medical information is distributed.
    Quality Assurance.  The quality assurance group
    ensures compliance with all regulatory requirements for the
    clinical development and manufacture of our products.
    Bioanalytical Sciences.  The bioanalytical
    sciences group develops and performs highly specialized assays
    that are used during monitoring of preclinical tests and
    clinical trials. Other assays help to ensure the quality and
    consistency of our products.
    Biopharmaceutical Development.  The
    biopharmaceutical development group develops robust
    manufacturing processes and product formulations to support
    clinical studies and future commercial supply.  Strategic
    Collaborations
     7




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Lead
    Commercial Collaborations
  Novartis
  ZALBIN.
    GlaxoSmithKline
  BENLYSTA . and/or
  Darapladib. Lp-PLA 2
 8




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Syncria.
  United
    States Government
  Raxibacumab. in vitro in vivo
  Product
    Collaborations and Agreements
  Aegera Therapeutics.
  CoGenesys.
  Research
    and Technology Collaborations
   9




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Process
    Development and Manufacturing Alliances
  state-of-the-art
  Patents
    and Proprietary Rights
           10




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Competition
  General.
  Basis of Competition.
  
    the quality and breadth of an organizations technology;
    the skill of an organizations employees and ability to
    recruit and retain skilled employees;
    an organizations intellectual property estate;
    the range of capabilities, from target identification and
    validation to drug discovery and development to manufacturing
    and marketing; and
    the availability of substantial capital resources to fund
    discovery, development, manufacturing and commercialization
    activities.    Products.
 11




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Government
    Regulation
    Preclinical Testing.
  Clinical Testing.
  
    Phase 1 clinical trials are conducted with a small number of
    subjects to determine the early safety profile and the pattern
    of drug distribution and metabolism.
    Phase 2 clinical trials are conducted with groups of patients
    afflicted with a specified disease in order to provide enough
    data to evaluate preliminary efficacy and optimal dosages
    statistically and to expand evidence of safety.
    Phase 3 clinical trials are large-scale, multi-center,
    comparative trials, which are designed to gather additional
    information for proper dosage and labeling of the drug and to
    demonstrate its overall safety and efficacy.    Marketing Approvals.
    Other Regulation.
 12




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Foreign Regulation.
  Possible Pricing Restrictions.
  Sources
    of Supply
    Manufacturing
     13




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Marketing
      Employees
   14




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ITEM 1A.
    RISK
    FACTORS  There are a number of risk factors that could cause our
    actual results to differ materially from those that are
    indicated by forward-looking statements. Those factors include,
    without limitation, those listed below and elsewhere herein.
  RISKS
    RELATED TO OUR BUSINESS
  If we are unable to commercialize our Phase 3 and earlier
    development molecules, we may not be able to recover our
    investment in our product development, manufacturing and
    marketing efforts.
    If we are unable to obtain marketing approval for
    BENLYSTATM or
    ZALBINTM,

    our results of operations and business will be materially and
    adversely affected.
    We may be unable to successfully establish commercial
    manufacturing capability and may be unable to obtain required
    quantities of our product candidates for commercial use.
   15




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Because we currently have only a limited marketing capability
    and in light of various factors, we may be unable to price or
    sell any of our products effectively.
    If we are unable to expand label usage of BENLYSTA, we may
    not recognize the full value of the product candidate and there
    may be adverse effects on our expected financial and operating
    results.
  ®
 16




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Because our product development efforts depend on new
    technologies, we cannot be certain that our efforts will be
    successful.
    
    these technologies or any or all of the Phase 3 and earlier
    development molecules based on these technologies will be
    ineffective or toxic, or otherwise fail to receive necessary
    regulatory clearances;
    the products, even if safe and effective, will be difficult to
    manufacture on a large scale or uneconomical to market;
    proprietary rights of third parties will prevent us or our
    collaborators from exploiting technologies or marketing
    products; and
    third parties will market superior or equivalent products.  Because we are a late-stage development company, we cannot be
    certain that we can develop our business or achieve
    profitability.
    We are continually evaluating our business strategy, and may
    modify this strategy in light of developments in our business
    and other factors.
       17




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PRODUCT
    DEVELOPMENT RISKS
  Because we have limited experience in developing and
    commercializing products, we may be unsuccessful in our efforts
    to do so.
    
    successfully complete laboratory testing and human studies;
    obtain and maintain necessary intellectual property rights to
    our products;
    obtain and maintain necessary regulatory approvals related to
    the efficacy and safety of our products;
    maintain production facilities meeting all regulatory
    requirements or enter into arrangements with third parties to
    manufacture our products on our behalf; and
    deploy sales and marketing resources effectively or enter into
    arrangements with third parties to provide these functions.  Because clinical trials for our products are expensive and
    protracted and their outcome is uncertain, we must invest
    substantial amounts of time and money that may not yield viable
    products.
        
    our inability to manufacture sufficient quantities of materials
    for use in clinical trials;
    variability in the number and types of patients available for
    each study;
    difficulty in maintaining contact with patients after treatment,
    resulting in incomplete data;
    unforeseen safety issues or side effects;
    poor or unanticipated effectiveness of products during the
    clinical trials; or
    government or regulatory delays.   18




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and/or
  We face risks in connection with our raxibacumab product in
    addition to risks generally associated with drug development.
   19




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Because neither we nor any of our collaboration partners have
    received marketing approval for any product candidate resulting
    from our research and development efforts, and because we may
    never be able to obtain any such approval, it is possible that
    we may not be able to generate any product revenue other than
    with respect to raxibacumab.
    RISK FROM
    COLLABORATION RELATIONSHIPS AND STRATEGIC ACQUISITIONS
  Our plan to use collaborations to leverage our capabilities
    and to grow in part through the strategic acquisition of other
    companies and technologies may not be successful if we are
    unable to integrate our partners capabilities or the
    acquired companies with our operations or if our partners
    capabilities do not meet our expectations.
    day-to-day
 20




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We reacquired rights to HGS-ETR1 from GSK, as well as all GSK
    rights to other TRAIL Receptor antibodies. We may be
    unsuccessful in developing and commercializing products from
    these antibodies without a collaborative partner.
  ®
  Our ability to receive revenues from the assets licensed in
    connection with our CoGenesys transaction will depend on Teva
    Bios ability to develop and commercialize those assets.
    Because we currently depend on our collaboration partners for
    substantial revenue, we may not become profitable on a
    sustainable basis if we cannot increase the revenue from our
    collaboration partners or other sources.
      
    develop marketable products;
    obtain regulatory approvals for products; or
    successfully market products.    If one of our collaborators pursues a product that competes
    with our products, there could be a conflict of interest and we
    may not receive milestone or royalty payments.
   21




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REGULATORY
    RISKS
  Because we are subject to extensive changing government
    regulatory requirements, we may be unable to obtain government
    approval of our products in a timely manner.
    Marketing Approvals.
      Foreign Regulation.
 22




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Because we are subject to environmental, health and safety
    laws, we may be unable to conduct our business in the most
    advantageous manner.
    INTELLECTUAL
    PROPERTY RISKS
  If our patent applications do not result in issued patents or
    if patent laws or the interpretation of patent laws change, our
    competitors may be able to obtain rights to and commercialize
    our discoveries.
       23




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If others file patent applications or obtain patents similar
    to ours, then the United States Patent and Trademark Office may
    deny our patent applications, or others may restrict the use of
    our discoveries.
    Because issued patents may not fully protect our discoveries,
    our competitors may be able to commercialize products similar to
    those covered by our issued patents.
    We rely on our collaboration partners to seek patent
    protection for the products they develop based on our
    research.
   24




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If we are unable to protect our trade secrets, others may be
    able to use our secrets to compete more effectively.
    FINANCIAL
    AND MARKET RISKS
  Because of our substantial indebtedness and lease
    obligations, we may be unable to adjust our strategy to meet
    changing conditions in the future.
    
    payments of interest on, and principal of, our indebtedness and
    our long-term lease obligations will be substantial and may
    exceed then current income and available cash;
    we may be unable to obtain additional future financing for
    continued clinical trials, capital expenditures, acquisitions or
    general corporate purposes;
    we may be unable to withstand changing competitive pressures,
    economic conditions and governmental regulations; and
    we may be unable to make acquisitions or otherwise take
    advantage of significant business opportunities that may arise.  We may not have adequate resources available to repay our
    Convertible Subordinated Notes due 2011 (2011 Notes)
    and our Convertible Subordinated Notes due 2012 (2012
    Notes) at maturity.
    To become a successful biopharmaceutical company, we may need
    additional funding in the future. If we do not obtain this
    funding on acceptable terms, we may not be able to generate
    sufficient revenue to repay our convertible debt, to launch and
    market successfully our products and to continue our
    biopharmaceutical discovery and development efforts.
   25




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
    the amount of revenue or cost sharing, if any, that we are able
    to obtain from our collaborations, any approved products, and
    the time and costs required to achieve those revenues;
    the timing, scope and results of preclinical studies and
    clinical trials;
    the size and complexity of our development programs;
    the time and costs involved in obtaining regulatory approvals;
    the timing and costs of increasing our manufacturing capacity;
    the costs of launching our products;
    the costs of commercializing our products, including marketing,
    promotional and sales costs;
    the commercial success of our products;
    our stock price;
    our ability to establish and maintain collaboration partnerships;
    competing technological and market developments;
    the costs involved in filing, prosecuting and enforcing patent
    claims; and
    scientific progress in our research and development programs.    
    delay, scale back or eliminate some or all of our research and
    development programs;
    delay, scale back or eliminate some or all of our
    commercialization activities;
    lose rights under existing licenses;
    relinquish more of, or all of, our rights to product candidates
    on less favorable terms than we would otherwise seek; and
    be unable to operate as a going concern.  Our short-term investments, marketable securities and
    restricted investments are subject to certain risks which could
    materially adversely affect our overall financial position.
   26




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other-than-temporary
  Our insurance policies are expensive and protect us only from
    some business risks, which could leave us exposed to
    significant, uninsured liabilities.
    We may be subject to product liability or other litigation,
    which could result in an inefficient allocation of our critical
    resources, delay the implementation of our business strategy
    and, if successful, materially and adversely harm our business
    and financial condition as a result of the costs of liabilities
    that may be imposed thereby.
    OTHER
    RISKS RELATED TO OUR BUSINESS
  Many of our competitors have substantially greater
    capabilities and resources and may be able to develop and
    commercialize products before we do or develop generic drugs
    that are similar to our products.
      
    the quality and breadth of an organizations technology;
    the skill of an organizations employees and ability to
    recruit and retain skilled employees;
    an organizations intellectual property portfolio; 27




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
    the range of capabilities, from target identification and
    validation to drug discovery and development to manufacturing
    and marketing; and
    the availability of substantial capital resources to fund
    discovery, development and commercialization activities.        If any of our product candidates for which we receive
    regulatory approval do not achieve broad market acceptance
    (including as a result of failing to differentiate our products
    from competitor products or as a result of failing to obtain
    reimbursement rates for our products that are competitive from
    the healthcare providers perspective), the revenues we
    generate from their sales will be limited and our business may
    not be profitable.
    
    our products perceived advantages over existing treatment
    methods (including relative convenience and ease of
    administration and prevalence and severity of any adverse
    events, including any unexpected adverse events of which we
    become aware after marketing approval);
    claims or other information (including limitations or warnings)
    in our products approved labeling;
    reimbursement and coverage policies of government and other
    third-party payors;
    pricing and cost-effectiveness;
    in the United States, the ability of group purchasing
    organizations, or GPOs (including distributors and other network
    providers), to sell our products to their constituencies;
    the establishment and demonstration in the medical community of
    the safety and efficacy of our products and our ability to
    provide acceptable evidence of safety and efficacy;
    availability of alternative treatments; and
    the prevalence of off-label substitution of biologically
    equivalent products.   28




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If the health care system or reimbursement policies change,
    the prices of our potential products may be lower than expected
    and our potential sales may decline.
    If we lose or are unable to attract key management or other
    personnel, we may experience delays in product development.
    We may be unable to fulfill the terms of our agreement with
    Hospira, Inc. and other agreements, if any, with potential
    customers for manufacturing process development and supply of
    selected biopharmaceutical products.
    Because we depend on third parties to conduct many of our
    human studies, we may encounter delays in or lose some control
    over our efforts to develop products.
   29




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RISKS
    RELATED TO OWNERSHIP OF OUR COMMON STOCK
  Because our stock price has been and will likely continue to
    be highly volatile, the market price of our common stock may be
    lower or more volatile than you expected.
    
    future announcements about our company or our competitors,
    including the results of testing, clinical trials, technological
    innovations or new commercial products;
    negative regulatory actions with respect to our potential
    products or regulatory approvals with respect to our
    competitors products;
    changes in government regulations;
    developments in our relationships with our collaboration
    partners;
    developments affecting our collaboration partners;
    announcements relating to health care reform and reimbursement
    levels for new drugs;
    our failure to acquire or maintain proprietary rights to the
    gene sequences we discover or the products we develop;
    litigation; and
    public concern as to the safety of our products.    The issuance and sale of shares underlying our outstanding
    convertible debt securities and options, as well as the sale of
    additional equity or equity-linked securities may materially and
    adversely affect the price of our common stock.
   30




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Our certificate of incorporation and bylaws could discourage
    acquisition proposals, delay a change in control or prevent
    transactions that are in your best interests.
    
    authorize the issuance of up to 20,000,000 shares of
    blank check preferred stock that could be issued by
    our board of directors to increase the number of outstanding
    shares and discourage a takeover attempt;
    limit who may call special meetings of stockholders; and
    establish advance notice requirements for nomination of
    candidates for election to the board of directors or for
    proposing matters that can be acted upon by stockholders at
    stockholders meetings. 31




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ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES      ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    (REMOVED
    AND RESERVED) 32




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PART II
  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
    MATTERS    High

Low2008First Quarter

$
11.79


$
4.86Second Quarter

$
6.79


$
5.21Third Quarter

$
7.94


$
5.17Fourth Quarter

$
6.06


$
1.242009First Quarter

$
2.78


$
0.48Second Quarter

$
3.19


$
0.82Third Quarter

$
20.50


$
2.39Fourth Quarter

$
31.15


$
17.96       Comparison
    of 5 Year Cumulative Total Return
  
    33




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ITEM 6.
    SELECTED
    CONSOLIDATED FINANCIAL DATA    Year Ended December 31,2009


2008


2007


2006


2005(in thousands, except per share and ratio data)Statement of Operations Data:Revenue:Product sales

$
154,074


$



$



$



$
Manufacturing and development services


50,653















Research and development collaborative agreements


71,022



48,422



41,851



25,755



19,113Total revenue


275,749



48,422



41,851



25,755



19,113Costs and expenses:Cost of product sales


15,805















Cost of manufacturing and development services


18,215















Research and development expenses


173,709



243,257



246,293



209,515



228,717General and administrative expenses


61,073



60,865



55,874



53,101



42,066Facility-related exit charges (credits)


759







(3,673
)


29,510



Total costs and expenses


269,561



304,122



298,494



292,126



270,783Income (loss) from operations


6,188



(255,700
)


(256,643
)


(266,371
)


(251,670
)Investment income


12,727



23,487



32,988



27,131



24,218Interest expense


(58,424
)


(62,912
)


(60,716
)


(39,606
)


(17,199
)Gain (loss) on extinguishment of debt


38,873















(1,204
)Gain on sale of long-term equity investment


5,259



32,518







14,759



1,302Other expense


(238
)


(6,284
)










Income (loss) before taxes


4,385



(268,891
)


(284,371
)


(264,087
)


(244,553
)Income tax benefit


1,274















Net income (loss)

$
5,659


$
(268,891
)

$
(284,371
)

$
(264,087
)

$
(244,553
)Net income (loss) per share, basic and diluted

$
0.04


$
(1.99
)

$
(2.12
)

$
(2.00
)

$
(1.87
)Other Data:Ratio of earnings to fixed charges


1.06















Coverage deficiency

$



$
(268,891
)

$
(284,371
)

$
(264,087
)

$
(244,553
)  34




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##### 



ITEM 6.
    SELECTED
    CONSOLIDATED FINANCIAL DATA, CONTINUED  As of December 31,2009


2008


2007


2006


2005(in thousands)Balance Sheet Data:Cash, cash equivalents, short-term investments, marketable
    securities and restricted
    investments(1)

$
1,191,660


$
372,939


$
603,840


$
763,084


$
646,220Total
    assets(1)


1,530,630



686,832



961,566



1,161,922



1,001,963Total debt and lease financing, less current
    portion(2)


598,435



664,074



637,513



612,811



351,034Accumulated deficit


(2,186,666
)


(2,192,325
)


(1,923,434
)


(1,639,063
)


(1,374,322
)Total stockholders equity (deficit)


755,415



(136,304
)


117,145



364,892



580,849     (1)
    
    Cash, cash equivalents, short-term investments, marketable
    securities and restricted investments and Total
    assets for 2009, 2008, 2007, 2006 and 2005 include
    $88,437, $69,360, $70,931, $61,165 and $220,171 respectively, of
    restricted investments relating to certain leases.(2)
    
    Total debt and lease financing, less current portion
    for 2009, 2008, 2007, 2006 and 2005 does not include any
    operating lease obligations under various facility and equipment
    lease arrangements. See Managements Discussion and
    Analysis of Financial Condition and Results of
    Operations  Liquidity and Capital Resources for
    additional discussion. 35




---



##### 



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Overview
  tm tm
  ®
    ®
       36




---



##### 



Overview
    (continued)
      and/or
  Critical
    Accounting Policies and the Use of Estimates
      Investments. Investments - Debt and Equity
    Securities other-than-temporary available-for-sale.
 37




---



##### 



Critical
    Accounting Policies and the Use of Estimates
    (continued)
  available-for-sale other-than-temporary
  Fair Value Measurements and Disclosures
  Inventory. first-in,
  Leases. 20-year
    Impairments of long-lived assets.
  Product sales.
  Manufacturing and development services. units-of-work units-of-work
  Research and development collaborative
    agreements. Revenue Recognition.
 38




---



##### 



Critical
    Accounting Policies and the Use of Estimates
    (continued)
      Research and Development.
  Stock Compensation.
    Exit Accruals.
 39




---



##### 



Critical
    Accounting Policies and the Use of Estimates
    (continued)
    Income taxes.
    Results
    of Operations
  Years Ended December 31, 2009 and 2008
  Revenues.
  Cost of sales.
  Expenses.
   40




---



##### 



Results
    of Operations (continued)
  Years Ended December 31, 2009 and 2008 (continued)
           project-by-project
       41




---



##### 



Results
    of Operations (continued)
  Years Ended December 31, 2009 and 2008 (continued)
           other-than-temporary
  Income Tax Benefit.
  Net Income (Loss).
  Years
    Ended December 31, 2008 and 2007
  Revenues.
 42




---



##### 



Results
    of Operations (continued)
  Years Ended December 31, 2008 and 2007 (continued)
     Expenses.
            project-by-project
   43




---



##### 



Results
    of Operations (continued)
  Years Ended December 31, 2008 and 2007 (continued)
             other-than-temporary other-than-temporary
  Net Income (Loss).
  Liquidity
    and Capital Resources
    available-for-sale.
 44




---



##### 



Liquidity
    and Capital Resources (continued)
    available-for-sale
      Clinical Trial Statusas of
    December 31,(2)Product
    Candidate(1)

Indication

2009

2008

2007ZALBIN

Hepatitis C

Phase 3(3)

Phase 3

Phase 3BENLYSTA

Systemic Lupus Erythematosus

Phase 3(4)

Phase 3

Phase 3BENLYSTA

Rheumatoid Arthritis

Phase 2(5)

Phase 2(5)

Phase 2(5)Raxibacumab

Anthrax

(6)

(6)

(6)HGS1029

Cancer

Phase 1

Phase 1

(7)HGS-ETR1

Cancer

Phase 2

Phase 2

Phase 2HGS-ETR2

Cancer

(8)

Phase 1

Phase 1     (1)
    
    Includes only those candidates for which an Investigational New
    Drug Application (IND) has been filed with the FDA.(2)
    
    Clinical Trial Status defined as when patients are being dosed.(3)
    
    Phase 3 results reported; BLA filed in 2009. Phase
    2 monthly dosing study underway.(4)
    
    Results from two Phase 3 clinical trials reported; second of
    these two concluding in 2010; pre-BLA activities underway.(5)
    
    Initial Phase 2 trial completed; treatment IND ongoing and
    further development under review.(6)
    
    BLA filed in 2009; Complete Response Letter received from FDA;
    additional work ongoing.(7)
    
    IND filed in December 2007 with respect to HGS1029 (formerly
    AEG40826).(8)
    
    Ongoing Phase 1 trial by National Institutes of Health; further
    development not anticipated.   45




---



##### 



Liquidity
    and Capital Resources (continued)
                 46




---



##### 



Liquidity
    and Capital Resources (continued)
      Payments Due by PeriodOne Year


Two to


Four to


AfterTotal


or Less


Three Years


Five Years


Five Years(dollars in millions)Contractual ObligationsLong-term debt  convertible
    notes(1)

$
426.7


$
9.1


$
417.6


$



$
Long-term lease commitment 
    BioMed(2)


471.0



24.5



50.5



52.6



343.4Operating
    leases(3)


367.1



20.5



42.1



43.6



260.9Unconditional purchase
    obligations(4)


1.0



1.0











Raxibacumab milestones and
    royalties(5)


11.2



3.2



8.0







Other long-term liabilities reflected on our balance
    sheets(6)


















Total contractual cash
    obligations(7)

$
1,277.0


$
58.3


$
518.2


$
96.2


$
604.3     (1)
    
    Contractual interest obligations related to our convertible
    subordinated notes included above total $22.8 million as of
    December 31, 2009. Contractual interest obligations of
    $9.1 million, $13.7 million are due in one year or
    less and two to three years, respectively.(2)
    
    Contractual interest obligations related to BioMed are included
    above and aggregate $418.1 million as of December 31,
    2009. Contractual interest obligations of $24.5 million,
    $50.5 million, $52.6 million and $290.5 million
    are due in one year or less, two to three years, four to five
    years and after five years, respectively.(3)
    
    Includes Traville headquarters operating lease with BioMed with
    aggregate payments of $343.4 million. Lease payments of
    $17.9 million, $36.8 million, $38.3 million and
    $250.4 million are due in one year or less, two to three
    years, four to five years and after five years, respectively.(4)
    
    Our unconditional purchase obligations relate to commitments for
    capital expenditures.(5)
    
    Includes milestone payments and royalties associated with the
    delivery of raxibacumab to the U.S. Strategic National Stockpile.(6)
    
    In the event we reach certain development milestones for ZALBIN,
    BENLYSTA or raxibacumab such as successful completion of Phase 3
    trials or regulatory approval, we would be obligated to make
    payments of up to $9.0 million over the next five years. In
    the event we reach certain development milestones related to
    HGS1029, we would be obligated to pay up to $204.0 million.
    Our other products are in either Phase 1 or Phase 2 and would
    also obligate us to make certain milestone payments should they
    reach Phase 3 or regulatory approval. These other payments could
    result in aggregate milestone payments of $14.5 million.
    Because we cannot forecast with any degree of certainty whether
    any of these products will reach these milestones, we have
    excluded these amounts and any royalty payments, except for
    those related to raxibacumab sales under the current order from
    the USG, from the above table.(7)
    
    For additional discussion of our debt obligations and lease
    commitments, see Note F, Long-Term Debt and Note G,
    Commitments and Other Matters, of the Notes to the Consolidated
    Financial Statements. 47




---



##### 



Liquidity
    and Capital Resources (continued)
       Off-Balance
    Sheet Arrangements
     48




---



##### 



Safe
    Harbor Statement under the Private Securities Litigation Reform
    Act of 1995
  Form 10-K
 49




---



##### 



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK      sub-prime
       50




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA    ITEM 9.
    CHANGES
    AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
    DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Form 10-K
  Changes
    in Internal Control
    Management
    Report on Internal Control over Financial Reporting
  Rule 13a-15(f) 15d-15(f)
  
    pertain to the management of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of the assets of the Company;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the Company are being made
    only in accordance with authorizations of management and
    directors of the Company; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Companys assets that could have a material effect on the
    financial statements.   51




---



##### 



ITEM 9A.
    CONTROLS
    AND PROCEDURES (continued)          ITEM 9B.
    OTHER
    INFORMATION   52




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON INTERNAL CONTROL OVER FINANCIAL REPORTING
                      53




---



##### 



PART III
  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES   54




---



##### 



PART IV
  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES     PageNumberReport of Ernst & Young LLP, Independent Registered
    Public Accounting Firm


F-2Consolidated Balance Sheets at December 31, 2009 and 2008


F-3Consolidated Statements of Operations for the years ended
    December 31, 2009, 2008 and 2007


F-4Consolidated Statements of Stockholders Equity (Deficit)
    for the years ended December 31, 2009, 2008 and 2007


F-5Consolidated Statements of Cash Flows for the years ended
    December 31, 2009, 2008 and 2007


F-6Notes to Consolidated Financial Statements


F-8         ExhibitNo.3.1*

Certificate of Incorporation of the Registrant (Filed as Exhibit
    3.1 to the Registrants Form 10-K for the fiscal year ended
    December 31, 1993, Exhibit 3.3 to the Form 10-K for the fiscal
    year ended December 31, 1997, Exhibit 3.1 to the Form 8-K
    filed December 16, 1999, Exhibit 3.1 to the Form 10-Q filed
    July 31, 2001, and Exhibit 3.1 to the Form 8-K filed on May 8,
    2008).3.2*

By-laws of the Registrant (Filed as Exhibit 3.2 to the
    Registrants Form 8-K filed May 8, 2008).4.1*

Form of Common Stock Certificate (Filed as Exhibit 4.1 to the
    Registrants Form S-3 Registration Statement, as amended
    (Commission File No. 333-45272), filed September 6, 2000).4.2*

Indenture dated as of October 4, 2004 between the Registrant and
    The Bank of New York, as trustee, including the form of
    21/4% Convertible
    Subordinated Notes due 2011 (Filed as Exhibit 4.1 to the
    Registrants Form 8-K filed October 4, 2004).4.3*

Indenture dated as of August 9, 2005 between the Registrant and
    The Bank of New York, as trustee, including the form of
    21/4% Convertible
    Subordinated Notes due 2012 (Filed as Exhibit 4.1 to the
    Registrants 8-K filed August 9, 2005).10.1*

Employment Agreement, dated November 21, 2004, with H. Thomas
    Watkins (Filed as Exhibit 10.1 to the Registrants Form 8-K
    filed November 23, 2004).10.2*

First Amendment to the Employment Agreement by and between Human
    Genome Sciences, Inc. and H. Thomas Watkins (Filed as Exhibit
    10.1 to the Registrants Form 8-K filed December 20, 2007).10.3*

Form of Executive Agreement (Filed as Exhibit 10.3 to the
    Registrants Form 8-K filed December 20, 2007).10.4*

Human Genome Sciences, Inc. Discretionary Bonus Policy (Filed as
    Exhibit 10.4 to the Registrants Form 8-K filed December
    20, 2007).10.5*

Form of Stock Unit Grant Agreement under the Non-Employee
    Director Equity Compensation Plan (Filed as Exhibit 10.5 to the
    Registrants Form 8-K filed December 20, 2007).10.6*

Second Amended and Restated Key Executive Severance Plan (Filed
    as Exhibit 10.2 to the Registrants Form 8-K filed December
    20, 2007).10.7*

Human Genome Sciences, Inc. Amended and Restated Stock Incentive
    Plan (Filed as Annex A to the Registrants Definitive Proxy
    Statement on Schedule 14A filed March 24, 2009).10.8*

Employee Stock Purchase Plan dated January 1, 2009 (Filed as
    Exhibit 99.1 to the Registrants Registration Statement on
    Form S-8 filed December 19, 2008). 55




---



##### 



ExhibitNo.10.9*

Lease Agreement between Maryland Economic Development
    Corporation and Human Genome Sciences, Inc., dated December 1,
    1997 (Filed as Exhibit 10.67 to the Registrants Form 10-K
    for the fiscal year ended December 31, 1997 and amended by
    Exhibit 10.10 hereto).10.10

Amendment No. 1 dated December 1, 2009 to Lease Agreement
    between Maryland Economic Development Corporation and Human
    Genome Sciences, Inc. dated December 1, 1997.10.11

Reimbursement Agreement dated December 1, 2009 by and between
    Human Genome Sciences, Inc. and Manufacturers and Traders Trust
    Company relating to 1997 Series Revenue Bonds.10.12

Amended and Restated Lease Agreement between Maryland Economic
    Development Corporation and Human Genome Sciences, Inc. dated
    December 1, 2009.10.13

Reimbursement Agreement dated December 1, 2009 by and between
    Human Genome Sciences, Inc. and Manufacturers and Traders Trust
    Company relating to Series 1999 A and B Revenue Bonds.10.14

Collateral Pledge Agreement dated December 1, 2009 among Human
    Genome Sciences, Inc., as Pledgor, Manufacturers and Traders
    Trust Company, as Pledgee, and Manufacturers and Traders Trust
    Company, as the Collateral Agent.10.15*

Form of Restricted Stock Agreement (Filed as Exhibit 10.20 to
    the Registrants Form 10-Q filed August 1, 2005).10.16*

Form of Stock Option Agreement (Filed as Exhibit 10.2 to the
    Registrants Form 8-K filed September 20, 2004).10.17*

Asset Purchase Agreement dated December 12, 2005 by and between
    TriGenesys, Inc and the Registrant (Filed as Exhibit 10.22 to
    the Registrants Form 10-K for the fiscal year ended
    December 31, 2005).10.18*

Co-development and Commercialization Agreement between Novartis
    International Pharmaceutical Ltd. and Human Genome Sciences,
    Inc., dated June 5, 2006 (Filed as Exhibit 10.1 to the
    Registrants Form 10-Q filed August 9, 2006).10.19*

Purchase and Sale Agreement between BioMed Realty, L.P. and
    Human Genome Sciences, Inc., dated May 2, 2006 (Filed as Exhibit
    10.2 to the Registrants Form 10-Q filed August 9, 2006).10.20*

Lease Agreement between BMR-Belward Campus Drive LSM LLC and
    Human Genome Sciences, Inc., dated May 24, 2006 (Filed as
    Exhibit 10.3 to the Registrants Form 10-Q filed August 9,
    2006).10.21*

Lease Agreement between BMR-Shady Grove Road HQ LLC and Human
    Genome Sciences, Inc., dated May 24, 2006 (Filed as Exhibit 10.4
    to the Registrants Form 10-Q filed August 9, 2006).10.22*

Solicitation (as amended) and Modification of Contract awarded
    by the Department of Health and Human Services to Human Genome
    Sciences, Inc. dated June 24, 2006 (Filed as Exhibit 10.5 to the
    Registrants Amended Form 10-Q filed September 27, 2007).10.23*

Amendment of Solicitation/Modification of Contract awarded by
    the Department of Health and Human Services to Human Genome
    Sciences, Inc. dated July 17, 2009. (Filed as Exhibit 10.1 to
    the Registrants Form 10-Q filed October 29, 2009).10.24*

Co-development and Commercialization Agreement between Glaxo
    Group Limited and Human Genome Sciences, Inc., dated August 1,
    2006 (Filed as Exhibit 10.25 to the Registrants Form 10-K
    filed February 26, 2009).10.25*

Second Amendment to the Employment Agreement by and between
    Human Genome Sciences, Inc., and H. Thomas Watkins (Filed as
    Exhibit 10.26 to the Registrants Form 10-K filed February
    26, 2009).10.26*

Form of First Amendment to Executive Agreement (Filed as Exhibit
    10.27 to the Registrants Form 10-K filed February 26,
    2009).10.27*

Form of First Amendment to the Registrants Second Amended
    and Restated Key Executive Severance Plan (Filed as Exhibit
    10.28 to the Registrants Form 10-K filed February 26,
    2009).12.1

Ratio of Earnings to Fixed Charges. 56




---



##### 



ExhibitNo.21.1

Subsidiaries.23.1

Consent of Ernst & Young LLP, Independent Registered Public
    Accounting Firm.31.1

Rule 13a-14(a) Certification of Principal Executive Officer.31.2

Rule 13a-14(a) Certification of Principal Financial Officer.32.1

Section 1350 Certification of Chief Executive Officer.32.2

Section 1350 Certification of Chief Financial Officer.     *
    
    Incorporated by reference.
    
    Confidential treatment requested for certain portions of this
    Exhibit pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934, as amended, which
    portions are omitted and filed separately with the Securities
    and Exchange Commission. 57




---



##### 



SIGNATURES
      BY: /s/  H.
    Thomas Watkins         Signature

Title

Date/s/  H.
    Thomas WatkinsH.
    Thomas Watkins

President, Chief Executive Officer and Director
    (Principal Executive Officer)

March 2, 2010/s/  Timothy
    C.  BarabeTimothy
    C.  Barabe

Senior Vice President and 
    Chief Financial Officer 
    (Principal Financial Officer and Principal Accounting Officer)

March 2, 2010/s/  Argeris
    N. Karabelas, Ph.D.Argeris
    N. Karabelas, Ph.D.

Chairman of the Board

March 2, 2010/s/  Richard
    J. DanzigRichard
    J. Danzig

Director

March 2, 2010/s/  Jürgen
    Drews, M.D.Jürgen
    Drews, M.D.

Director

March 2, 2010/s/  Maxine
    Gowen, Ph.D.Maxine
    Gowen, Ph.D.

Director

March 2, 2010/s/  Tuan
    Ha-NgocTuan
    Ha-Ngoc

Director

March 2, 2010/s/  John
    LaMattina, Ph.D.John
    LaMattina, Ph.D.

Director

March 2, 2010/s/  Augustine
    LawlorAugustine
    Lawlor

Director

March 2, 2010/s/  David
    SouthwellDavid
    Southwell

Director

March 2, 2010/s/  Robert
    C. Young, M.D.Robert
    C. Young, M.D.

Director

March 2, 2010  58




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  PageNumberReport of Ernst & Young LLP, Independent Registered
    Public Accounting Firm


F-2Consolidated Balance Sheets at December 31, 2009 and 2008


F-3Consolidated Statements of Operations for the years ended
    December 31, 2009, 2008 and 2007


F-4Consolidated Statements of Stockholders Equity (Deficit)
    for the years ended December 31, 2009, 2008 and 2007


F-5Consolidated Statements of Cash Flows for the years ended
    December 31, 2009, 2008 and 2007


F-6Notes to Consolidated Financial Statements


F-8  F-1




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                  F-2




---



##### 



HUMAN
    GENOME SCIENCES, INC.



CONSOLIDATED
    BALANCE SHEETS  December 31,2009


2008(in thousands, except share and per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
567,667


$
15,248Short-term investments


151,528



22,691Collaboration receivables


10,356



22,076Accounts receivable


23,892



2,871Inventory


20,149



Prepaid expenses and other current assets


7,176



5,280Total current assets


780,768



68,166Marketable securities


384,028



265,640Property, plant and equipment (net of accumulated depreciation)


263,123



274,315Restricted investments


88,437



69,360Long-term equity investments


3,016



2,606Other assets


11,258



6,745TOTAL ASSETS

$
1,530,630


$
686,832LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable and accrued expenses

$
42,369


$
55,434Accrued payroll and related taxes


30,997



18,574Accrued exit expenses


2,227



2,952Deferred revenues


88,565



43,746Total current liabilities


164,158



120,706Convertible subordinated debt


349,807



417,597Lease financing


248,628



246,477Deferred revenues, net of current portion


1,978



29,563Accrued exit expenses, net of current portion


1,979



2,075Deferred rent


8,665



6,718Total liabilities


775,215



823,136Stockholders equity (deficit):Preferred stock  $0.01 par value; shares
    authorized  20,000,000; no shares issued or
    outstanding






Common stock  $0.01 par value; shares
    authorized  400,000,000; shares issued and
    outstanding of 185,254,660 and 135,739,978 at December 31,
    2009 and 2008, respectively


1,853



1,357Additional paid-in capital


2,932,863



2,059,154Accumulated other comprehensive income (loss)


7,365



(4,490
)Accumulated deficit


(2,186,666
)


(2,192,325
)Total stockholders equity (deficit)


755,415



(136,304
)TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)

$
1,530,630


$
686,832    F-3




---



##### 



HUMAN
    GENOME SCIENCES, INC.



CONSOLIDATED
    STATEMENTS OF OPERATIONS  Year Ended December 31,2009


2008


2007(in thousands, except share and per share amounts)Revenue:Product sales

$
154,074


$



$
Manufacturing and development services


50,653







Research and development collaborative agreements


71,022



48,422



41,851Total revenue


275,749



48,422



41,851Costs and expenses:Cost of product sales


15,805







Cost of manufacturing and development services


18,215







Research and development expenses


173,709



243,257



246,293General and administrative expenses


61,073



60,865



55,874Facility-related exit charges (credits)


759







(3,673
)Total costs and expenses


269,561



304,122



298,494Income (loss) from operations


6,188



(255,700
)


(256,643
)Investment income


12,727



23,487



32,988Interest expense


(58,424
)


(62,912
)


(60,716
)Gain on extinguishment of debt


38,873







Gain on sale of long-term equity investment


5,259



32,518



Other expense


(238
)


(6,284
)


Income (loss) before taxes


4,385



(268,891
)


(284,371
)Income tax benefit


1,274







Net income (loss)

$
5,659


$
(268,891
)

$
(284,371
)Basic net income (loss) per share

$
0.04


$
(1.99
)

$
(2.12
)Diluted net income (loss) per share

$
0.04


$
(1.99
)

$
(2.12
)Weighted average shares outstanding, basic


149,334,426



135,406,642



134,333,418Weighted average shares outstanding, diluted


155,053,473



135,406,642



134,333,418    F-4




---



##### 



HUMAN
    GENOME SCIENCES, INC.
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
    (DEFICIT)  AccumulatedAdditional


OtherCommon Stock


Paid-In


Comprehensive


AccumulatedShares


Amount


Capital


Income (Loss)


Deficit


Total(in thousands, except share amounts)Balance  December 31, 2006


133,820,053


$
1,338


$
2,006,212


$
(3,594
)

$
(1,639,063
)

$
364,893Comprehensive income (loss):Net loss


















(284,371
)


(284,371
)Unrealized gain on investments














6,724







6,724Cumulative translation adjustment














22







22Comprehensive loss






















(277,625
)Shares of common stock issued pursuant to stock-based
    compensation plans


1,116,459



11



8,175











8,186Stock-based compensation expense










21,691











21,691Balance  December 31, 2007


134,936,512



1,349



2,036,078



3,152



(1,923,434
)


117,145Comprehensive income (loss):Net loss


















(268,891
)


(268,891
)Unrealized loss on investments














(7,052
)






(7,052
)Cumulative translation adjustment














(590
)






(590
)Comprehensive loss






















(276,533
)Shares of common stock issued pursuant to stock-based
    compensation plans


803,466



8



4,589











4,597Stock-based compensation expense










18,487











18,487Balance  December 31, 2008


135,739,978



1,357



2,059,154



(4,490
)


(2,192,325
)


(136,304
)Comprehensive income (loss):Net income


















5,659



5,659Unrealized gain on investments














11,264







11,264Cumulative translation adjustment














591







591Comprehensive income






















17,514Issuance of common stock pursuant to public offerings


44,522,250



446



812,423











812,869Shares of common stock issued pursuant to stock-based
    compensation plans


4,992,432



50



48,762











48,812Stock-based compensation expense










12,524











12,524Balance  December 31, 2009


185,254,660


$
1,853


$
2,932,863


$
7,365


$
(2,186,666
)

$
755,415    F-5




---



##### 



HUMAN
    GENOME SCIENCES, INC.



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,2009


2008


2007(in thousands)Cash flows from operating activities:Net income (loss)

$
5,659


$
(268,891
)

$
(284,371
)Adjustments to reconcile net income (loss) to net cash used in
    operating activities:Stock-based compensation expense


12,524



18,593



21,691Depreciation and amortization


21,255



21,143



21,907Amortization of debt discount


21,936



24,183



22,130Gain on extinguishment of debt


(38,873
)






Gain on sale of building










(1,704
)Facility-related exit charges (credits)


759







(1,969
)Gain on sale of long-term equity investment


(5,259
)


(32,518
)


Accrued interest on short-term investments, marketable
    securities and restricted investments


(493
)


581



(4,631
)Non-cash expenses and other


3,759



8,265



2,995Changes in operating assets and liabilities:Collaboration receivables


4,800



13,792



25,807Accounts receivable


(21,021
)






Inventory


(20,149
)






Prepaid expenses and other assets


(1,640
)


2,760



(366
)Accounts payable and accrued expenses


(13,152
)


(7,247
)


25,770Accrued payroll and related taxes


12,423



4,126



(930
)Deferred revenues


17,234



(44,959
)


(633
)Accrued exit expenses


(1,953
)


(2,083
)


(2,376
)Deferred rent


1,859



1,992



2,021Net cash used in operating activities


(332
)


(260,263
)


(174,659
)Cash flows from investing activities:Purchase of short-term investments and marketable securities


(625,041
)


(15,065
)


(160,379
)Proceeds from sale and maturities of short-term investments and
    marketable securities


388,277



211,722



278,031Proceeds from sale of long-term equity investment


5,259



47,336



Capital expenditures  property, plant, and equipment


(10,019
)


(9,724
)


(3,042
)Release of restricted investments


3,291



4,877



Proceeds from sale of building, net of transaction costs










14,824Purchase of building, net of transaction costs










(13,120
)Purchase of long-term equity investment










(3,148
)Net cash provided by (used in) investing activities


(238,233
)


239,146



113,166Cash flows from financing activities:Purchase of restricted investments


(47,002
)


(28,897
)


(26,642
)Proceeds from sale and maturities of restricted investments


26,426



26,120



17,857Proceeds from issuance of common stock, net of issuance costs


861,573



4,432



8,151Extinguishment of long-term debt


(49,998
)






Purchase of treasury stock


(15
)


(105
)


Net cash provided by (used in) financing activities


790,984



1,550



(634
)Net increase (decrease) in cash and cash equivalents


552,419



(19,567
)


(62,127
)Cash and cash equivalents  beginning of period


15,248



34,815



96,942Cash and cash equivalents  end of period

$
567,667


$
15,248


$
34,815  F-6




---



##### 



SUPPLEMENTAL
    DISCLOSURES OF CASH FLOW INFORMATION, NON-CASH OPERATING,
    INVESTING AND FINANCING ACTIVITIES
  Year Ended December 31,2009


2008


2007(in thousands)Cash paid during the period for:Interest

$
33,609


$
34,729


$
34,319Income taxes

$
809


$



$
        F-7




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
  (NOTE A) 
    The
    Company      (NOTE B) 
    Summary
    of Significant Accounting Policies  Use of
    Estimates
    Principles
    of Consolidation
    Cash
    Equivalents, Short-term Investments, Marketable Securities,
    Long-term Equity Investments and Restricted
    Investments
    available-for-sale. available-for-sale
 F-8




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  Investment
    Risk
  sub-prime
  Other-Than-Temporary
    Impairment of Investments
  other-than-temporary Investments  Debt and Equity Securities
  Inventory
  first-in,
  Depreciation
    Buildings

30 yearsLand improvements

lesser of the lease term or the useful lifeProduction equipment

5 - 10 yearsLaboratory equipment

3 - 10 yearsComputer equipment and software

3 - 5 yearsFurniture and office equipment

3 - 5 yearsLeasehold improvements

lesser of the lease term or the useful life   Impairment
    of Long-Lived Assets
  Property, Plant and Equipment.
 F-9




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  Product
    sales
    Manufacturing
    and development services
  units-of-work units-of-work
  Research
    and development collaborative agreements
     F-10




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  Cost of
    product sales
        Cost of
    manufacturing and development services
    Research
    and Development
  Research and Development
  Leases
  Leases,
  Stock-Based
    Compensation
  Compensation  Stock Compensation
 F-11




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  Financing
    Costs Related to Long-term Debt
    Patent
    Application Costs
    Net
    Income (Loss) Per Share
  Earnings Per Share
  Foreign
    Currency
    Comprehensive
    Income (Loss)
  Comprehensive Income available-for-sale
    December 31,2009


2008Net unrealized gains (losses) on:Short-term investments and marketable securities

$
5,496


$
(4,077
)Long-term equity investment in VIA Pharmaceuticals


21



38Restricted investments


1,816



108Foreign currency translation


32



(559
)Accumulated other comprehensive income (loss)

$
7,365


$
(4,490
)      F-12




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  Sources
    of Supply
    Recent
    Accounting Pronouncements
    Fair Value Measurements
    and Disclosures
  Debt
    other-than-temporarily other-than-temporarily
  The FASB Accounting Standards
    Codification tm  and the Hierarchy of Generally Accepted Accounting
    Principles, a replacement of FASB Statement No. 162
 F-13




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  
 Recent
    Accounting Pronouncements (continued)
     F-14




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE C) 
    Investments    December 31, 2009Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


ValueU.S. Treasury and agencies

$
7,997


$
32


$



$
8,029Government-sponsored enterprise securities


34,667



672



(29
)


35,310Corporate debt securities


107,283



1,099



(193
)


108,189Subtotal  Short-term investments


149,947



1,803



(222
)


151,528Government-sponsored enterprise securities


172,191



2,009



(673
)


173,527Corporate debt securities


208,824



2,106



(429
)


210,501Subtotal  Marketable securities


381,015



4,115



(1,102
)


384,028Cash and cash equivalents


6,693











6,693Government-sponsored enterprise securities


20,316



394



(17
)


20,693Corporate debt securities


59,612



1,470



(31
)


61,051Subtotal  Restricted investments


86,621



1,864



(48
)


88,437Total

$
617,583


$
7,782


$
(1,372
)

$
623,993   December 31, 2008Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


ValueU.S. Treasury and agencies

$
755


$
27


$



$
782Government-sponsored enterprise securities


10,507



271



(22
)


10,756Corporate debt securities


11,421



29



(297
)


11,153Subtotal  Short-term investments


22,683



327



(319
)


22,691U.S. Treasury and agencies


16,150



368



(455
)


16,063Government-sponsored enterprise securities


108,877



3,229



(262
)


111,844Corporate debt securities


145,621



263



(8,151
)


137,733Subtotal  Marketable securities


270,648



3,860



(8,868
)


265,640Cash and cash equivalents


5,773











5,773U.S. Treasury and agencies


6,044



95







6,139Government-sponsored enterprise securities


18,145



403



(11
)


18,537Corporate debt securities


39,289



299



(677
)


38,911Subtotal  Restricted investments


69,251



797



(688
)


69,360Total

$
362,582


$
4,984


$
(9,875
)

$
357,691    F-15




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE C) 
    Investments
    (continued)        Short-term
    investments, Marketable securities and Restricted
    investments  unrealized losses
    December 31, 2009Loss Position


Loss Positionfor Less Than


for Greater ThanTwelve Months


Twelve Months


TotalFair


Unrealized


Fair


Unrealized


Fair


UnrealizedValue


Losses


Value


Losses


Value


LossesGovernment-sponsored enterprise securities

$
23,026


$
(29
)

$



$



$
23,026


$
(29
)Corporate debt securities


24,751



(181
)


4,474



(12
)


29,225



(193
)Subtotal  Short-term investments


47,777



(210
)


4,474



(12
)


52,251



(222
)Government-sponsored enterprise securities


154,032



(673
)










154,032



(673
)Corporate debt securities


76,595



(405
)


1,231



(24
)


77,826



(429
)Subtotal  Marketable securities


230,627



(1,078
)


1,231



(24
)


231,858



(1,102
)Government-sponsored enterprise securities


7,317



(17
)


14







7,331



(17
)Corporate debt securities


6,212



(31
)










6,212



(31
)Subtotal  Restricted investments


13,529



(48
)


14







13,543



(48
)Total

$
291,933


$
(1,336
)

$
5,719


$
(36
)

$
297,652


$
(1,372
)   F-16




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE C) 
    Investments
    (continued)  
 Short-term
    investments, Marketable securities and Restricted
    investments  unrealized losses (continued)
  December 31, 2008Loss Position


Loss Positionfor Less Than


for Greater ThanTwelve Months


Twelve Months


TotalFair


Unrealized


Fair


Unrealized


Fair


UnrealizedValue


Losses


Value


Losses


Value


LossesGovernment-sponsored enterprise securities

$



$



$
962


$
(22
)

$
962


$
(22
)Corporate debt securities


6,543



(284
)


145



(13
)


6,688



(297
)Subtotal  Short-term investments


6,543



(284
)


1,107



(35
)


7,650



(319
)U.S. Treasury and agencies


7,540



(455
)










7,540



(455
)Government-sponsored enterprise securities


1,714



(4
)


11,259



(258
)


12,973



(262
)Corporate debt securities


77,637



(4,597
)


39,334



(3,554
)


116,971



(8,151
)Subtotal  Marketable securities


86,891



(5,056
)


50,593



(3,812
)


137,484



(8,868
)Government-sponsored enterprise securities


2,975



(5
)


337



(6
)


3,312



(11
)Corporate debt securities


19,002



(637
)


4,016



(40
)


23,018



(677
)Subtotal  Restricted investments


21,977



(642
)


4,353



(46
)


26,330



(688
)Total

$
115,411


$
(5,982
)

$
56,053


$
(3,893
)

$
171,464


$
(9,875
)   other-than-temporary other-than-temporary
  available-for-sale
   F-17




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE C) 
    Investments
    (continued)  Other
    Information
    Short-term


Marketable


RestrictedInvestments


Securities


InvestmentsAmortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


ValueLess than one year

$
149,947


$
151,528


$



$



$
19,551


$
19,781Due in year two through year three










205,558



208,402



52,640



53,819Due in year four through year five










75,312



75,450



7,482



7,761Due after five years










100,145



100,176



6,948



7,076Total

$
149,947


$
151,528


$
381,015


$
384,028


$
86,621


$
88,437       Year Ended December 31,2009


2008


2007Proceeds on sale of investments prior to maturity

$
368,560


$
237,861


$
123,522Realized gains


7,026



34,113



494Realized losses


(2,522
)


(494
)


(439
)       (NOTE D) 
    Collaborations and U.S. Government Agreement
  Principal
    Agreements
  Agreement
    with Novartis
   F-18




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE D) 
    Collaborations
    and U.S. Government Agreement (continued)  
 Principal
    Agreements (continued)
  
 Agreement
    with Novartis (continued)
    Agreements
    with GlaxoSmithKline
  tm
       F-19




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE D) 
    Collaborations
    and U.S. Government Agreement (continued)  
 Principal
    Agreements (continued)
  
 Agreements
    with GlaxoSmithKline (continued)
  Nonmonetary Transactions
  ®
  License
    Agreement and Manufacturing Services Agreement with Teva
    Biopharmaceuticals USA, Inc. (formerly CoGenesys)
    Collaboration
    reimbursements with respect to Novartis and GSK
    U.S.
    Government Agreement
   F-20




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE D) 
    Collaborations
    and U.S. Government Agreement (continued)  
 Principal
    Agreements (continued)
  
 U.S.
    Government Agreement (continued)
      Other
    Collaborative and License Agreements
         F-21




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE E) 
    Other
    Financial Information  Collaboration
    Receivables
      Inventory
    December 31,2009


2008Raw materials

$
4,293


$
Work-in-process


9,512



Finished goods


6,344



$
20,149


$
   Property, Plant and Equipment
    December 31,2009


2008Building (LSM)

$
204,151


$
204,151Laboratory and production equipment


94,644



88,226Computer equipment and software


38,793



36,249Land and improvements


30,521



30,521Leasehold improvements


25,046



23,932Furniture and office equipment


6,629



6,007Construction-in-progress


3,469



3,793403,253



392,879Less: accumulated depreciation


(140,130
)


(118,564
)$
263,123


$
274,315    F-22




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE E) 
    Other
    Financial Information (continued)  Other
    Assets
    December 31,2009


2008Collaboration receivables, non-current

$
6,920


$
Deferred financing costs, net of accumulated amortization of
    $6,846 and $5,663, as of December 31, 2009 and 2008,
    respectively


2,442



4,481Other assets


1,896



2,264$
11,258


$
6,745     Accounts
    Payable and Accrued Expenses
    December 31,2009


2008Clinical trial costs

$
23,641


$
40,212Accrued expenses and fixed asset purchases


5,736



6,091Professional fees


6,324



5,878Accrued interest


2,668



3,253Collaboration payable


4,000



$
42,369


$
55,434    F-23




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE F) 
    Long-Term
    Debt    December 31,Debt

Interest Rate


Maturities


2009


200821/4% Convertible
    Subordinated Notes due 2011


2.25
%


October 2011


$
178,104


$
239,24721/4% Convertible
    Subordinated Notes due 2012


2.25
%


August 2012



171,703



178,350349,807



417,597BioMed lease financing


11.0
%


May 2026



248,628



246,477598,435



664,074Less current portion














$
598,435


$
664,074     2010

$
2011


197,1002012


206,7502013


2014


2015 and thereafter


52,961$
456,811     1 4 1 4 1 4 1 4 1 4 1 4 1 4
 F-24




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE F) 
    Long-Term
    Debt (continued)  1 4 1 4 1 4 1 4
  1 4 1 4 1 4 1 4 1 4 1 4 1 4 1 4 1 4 1 4 1 4
  1 4 1 4
    December 31,2009


2008Carrying


Fair


Carrying


FairAmount


Value


Amount


Value21/4% Convertible
    Subordinated Notes due 2011

$
178,104


$
402,084


$
239,247


$
86,80021/4% Convertible
    Subordinated Notes due 2012


171,703



372,150



178,350



57,500BioMed lease financing


248,628



265,293



246,477



306,446$
598,435


$
1,039,527


$
664,074


$
450,746  F-25




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE F) 
    Long-Term
    Debt (continued)    December 31, 2009Unamortized


CarryingFace Value


Debt Discount


Amount21/4% Convertible
    Subordinated Notes due 2011

$
197,100


$
(18,996
)

$
178,10421/4% Convertible
    Subordinated Notes due 2012


206,750



(35,047
)


171,703$
403,850


$
(54,043
)

$
349,807   December 31, 2008Unamortized


CarryingFace Value


Debt Discount


Amount21/4% Convertible
    Subordinated Notes due 2011

$
280,000


$
(40,753
)

$
239,24721/4% Convertible
    Subordinated Notes due 2012


230,000



(51,650
)


178,350$
510,000


$
(92,403
)

$
417,597         (NOTE G) 
    Commitments
    and Other Matters  Leases
    Year Ending December 31,2010

$
20,5372011


20,8862012


21,2462013


21,6132014


21,9932015 and thereafter


260,876$
367,151    F-26




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE G) 
    Commitments
    and Other Matters (continued)  
 Leases
    (continued)
                  Purchase
    Commitments
   F-27




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE G) 
    Commitments
    and Other Matters (continued)  401(k) Plan
    Contingent
    Liabilities
    (NOTE H) 
    Stockholders
    Equity  Public
    Offerings of Common Stock
    Stock-based
    Compensation Plans
    Year Ended December 31,2009


2008


2007Employee stock option and employee stock purchases plan
    compensation expense

$
11,935


$
17,630


$
20,691Restricted stock units


589



647



470Restricted stock awards






316



530Total

$
12,524


$
18,593


$
21,691     Stock
    Incentive Plan
     F-28




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE H) 
    Stockholders
    Equity (continued)  
 Stock-based
    Compensation Plans (continued)
  
 Stock
    Incentive Plan (continued)
        Weighted-AverageRemainingWeighted-Average


Contractual Term


Aggregate IntrinsicShares


Exercise Price


(years)


Value(1)Outstanding at January 1, 2009


28,373,151


$
15.40



5.71Granted


4,352,003



2.27Exercised


(4,584,767
)


10.50






$
51,205Forfeited


(691,887
)


5.83Expired


(2,847,326
)


20.90Outstanding at December 31, 2009


24,601,174



13.62



5.85



476,728Vested and expected to vest at December 31, 2009


23,555,132



14.01



4.10



448,954Exercisable at December 31, 2009


17,387,092



17.18



4.74



292,384     (1)
    
    Aggregate intrinsic value represents only the value for those
    options in which the exercise price of the option is less than
    the market value of the Companys stock on
    December 31, 2009, or for exercised options, the exercise
    date.    Options Outstanding


Options ExercisableWeighted-AverageRemaining


Weighted-AverageNumber


Contractual


Exercise


Number


Weighted-AverageRange of Exercise Price

Outstanding


Life (In Years)


Price


Exercisable


Exercise Price$0.52 to $10.00


8,665,356



8.18


$
3.89



2,998,103


$
5.84$10.01 to $12.50


8,522,924



5.94



10.97



7,314,130



11.02$12.51 to $15.00


3,850,937



3.99



12.79



3,807,981



12.79$15.01 to $35.00


975,496



4.72



21.21



680,417



20.45$35.01 to $86.19


2,586,461



0.92



53.38



2,586,461



53.3824,601,174



5.85



13.62



17,387,092



17.18    F-29




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE H) 
    Stockholders
    Equity (continued)  
 Stock-based
    Compensation Plans (continued)
  
 Stock
    Incentive Plan (continued)
        Year Ended December 31,2009

2008

2007Expected life:Stock options

5.5 years

5.4 years

5.0 yearsEmployee stock purchase plan rights

1.0 years

1.0 years

1.0 yearsInterest rate

1.4% - 2.8%

1.2% - 3.6%

3.4% - 4.9%Volatility

53.0% - 83.5%

41.9% - 57.3%

40.3% - 48.0%Dividend yield

0%

0%

0%     Expected Life of Stock-based Awards
  Interest Rate
  Volatility
  Dividend Yield
  Restricted
    Stock
   F-30




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE H) 
    Stockholders
    Equity (continued)  
 Stock-based
    Compensation Plans (continued)
  
 Stock
    Incentive Plan (continued)
  :
  Weighted-AverageGrant-Date FairShares


ValueRestricted stock at January 1, 2009


237,976


$
8.87Granted


65,587



0.52Vested


(73,066
)


9.20Forfeited


(24,760
)


6.38Restricted stock at December 31, 2009


205,737



6.39Expected to vest at December 31, 2009


174,876



6.39   ,
    Compensation  Stock Compensation
  Employee
    Stock Purchase Plan
    (NOTE I) 
    Preferred
    Share Purchase Rights   F-31




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE J) 
    Income Taxes
    Year Ended December 31,2009


2008


2007Federal income tax provision (benefit) at 34%

$
1,491


$
(91,416
)

$
(96,693
)Change in state income tax rate










(14,798
)State taxes, net of federal tax benefit


185



(14,161
)


(12,652
)Tax credits, principally for research and development


(1,813
)


(3,500
)


(2,911
)Research and development credit refunds


(1,274
)






Other


(3,303
)


3,447



3,585Increase in valuation allowance on deferred tax asset


3,440



105,630



123,469$
(1,274
)

$



$
       Current


Long-TermAsset


Asset (Liability)December 31, 2009Net operating loss carryforward

$



$
739,900Research and development and other tax credit carryforwards






35,282Deferred revenue


34,935



781Facility exit charge






3,957Net unrealized gains on investments






(2,885
)Intangible assets


394



4,602Equity-based compensation






11,561Depreciation






14,154Unamortized debt discount






(21,317
)Reserves and accruals


11,687



10,068Other






72647,016



796,829Less valuation allowance


(47,016
)


(796,829
)$



$
   F-32




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE J) 
    Income Taxes (continued)
  Current


Long-TermAsset


Asset (Liability)December 31, 2008Net operating loss carryforward

$



$
768,037Research and development and other tax credit carryforwards






33,469Capital loss carryforward






289Deferred revenue


17,256



11,661Facility exit charge






4,518Net unrealized losses on investments






1,805Intangible assets


394



4,996Equity-based compensation






11,864Depreciation






8,352Unamortized debt discount






(36,448
)Reserves and accruals


7,964



10,555Other






29625,614



819,394Less valuation allowance


(25,614
)


(819,394
)$



$
       Year Ended December 31,2009


2008


2007Current:Federal

$
(1,274
)

$



$
State










Foreign taxes










Deferred










$
(1,274
)

$



$
     with-and-without
 F-33




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE J) 
    Income Taxes (continued)
        Income Taxes
      2009


2008


2007Balance as of January 1

$
30,282


$
29,611


$
28,641Gross increases related to prior year tax positions






62



Gross decreases related to prior year tax positions


(1,108
)


(558
)


Gross increases related to current year tax positions


848



1,167



970Balance as of December 31

$
30,022


$
30,282


$
29,611     (NOTE K) 
    Facility-Related
    Exit Charges (Credits)  Exit or Disposal Cost Obligations
 F-34




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE K) 
    Facility-Related
    Exit Charges (Credits) (continued)        Balance as of January 1, 2009

$
5,027Accretion recorded


1,384Subtotal


6,411Cash items


(2,115
)Accrual adjustment, net


(90
)Balance as of December 31, 2009


4,206Less current portion


(2,227
)$
1,979    (NOTE L) 
    Fair
    Value Measurements     F-35




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE L) 
    Fair
    Value Measurements (continued)    Level 1:

Observable inputs such as quoted prices (unadjusted) in active
    markets for identical assets or liabilities.Level 2:

Inputs other than quoted prices that are observable for the
    asset or liability, either directly or indirectly. These include
    quoted prices for similar assets or liabilities in active
    markets and quoted prices for identical or similar assets or
    liabilities in markets that are not active.Level 3:

Unobservable inputs that reflect the reporting entitys own
    assumptions.
       Fair Value


Fair Value Measurements as ofas of


December 31, 2009December 31,


Using Fair Value HierarchyDescription

2009


Level 1


Level 2


Level 3Cash and cash equivalents

$
567,667


$
567,667


$



$
Short-term investments


151,528



8,029



143,499



Marketable securities


384,028







384,028



Long-term equity investment


21



21







Restricted investments


88,437



6,693



81,744



Total

$
1,191,681


$
582,410


$
609,271


$
       sub-prime
 F-36




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE L) 
    Fair
    Value Measurements (continued)      (NOTE M) 
    Teva
    Biopharmaceuticals USA, Inc. (formerly CoGenesys)         F-37




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE N) 
    Earnings
    Per Share    December 31,2009


2008


2007Numerator:Net income used for diluted net income (loss) per share

$
5,659


$
(268,891
)

$
(284,371
)Denominator:Weighted average shares outstanding


149,334,426



135,406,642



134,333,418Effect of dilutive securities:Employee stock options and restricted stock units


5,719,047







Weighted average shares used for diluted net income (loss) per
    share


155,053,473



135,406,642



134,333,418Diluted net income (loss) per share

$
0.04


$
(1.99
)

$
(2.12
)     (NOTE O) 
    Related
    Parties     F-38




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except per share data)
   (NOTE P) 
    Quarterly
    Financial Information (unaudited)    1st

    Quarter


2nd

    Quarter


3rd

    Quarter


4th

    Quarter2009Revenue

$
177,277


$
26,681


$
18,834


$
52,957Income (loss) from operations


97,795



(53,414
)


(37,964
)


(229
)Net income (loss)


129,813



(65,411
)


(49,003
)


(9,740
)Net income (loss) per share, basic


0.96



(0.48
)


(0.32
)


(0.06
)Net income (loss) per share, diluted


0.85



(0.48
)


(0.32
)


(0.06
)2008Revenue

$
12,275


$
11,567


$
11,674


$
12,906Income (loss) from operations


(76,427
)


(70,357
)


(58,310
)


(50,606
)Net income (loss)


(52,719
)


(80,107
)


(74,181
)


(61,884
)Net income (loss) per share, basic and diluted


(0.39
)


(0.59
)


(0.55
)


(0.46
)        F-39