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, 2008
  Commission File Number 0-22962
 HUMAN GENOME SCIENCES,
    INC.
 (Exact name of
    registrant)
  Delaware

22-3178468(State of
    organization)

(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
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer o

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 36,528,324 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,
    2008. 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
    Syncria ®
         1




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20850-7464. (301) 309-8504. Form 10-K.
  Strategy
    
    Accelerate the development and commercialization of our
    late-stage products.Our priority focus is on our
    product candidates with the highest therapeutic and commercial
    potential, and accelerating the progress of our late-stage
    compounds toward commercialization.
    Build strong partnerships with global leaders in the
    pharmaceutical industry.  The co-development and
    commercialization agreements we have in place for our lead
    products  with Novartis for Albuferon and with GSK
    for LymphoStat-B  could help HGS assure that these
    products achieve their full therapeutic and commercial
    potential. As our mid-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. In April 2008, we reacquired
    rights to our TRAIL receptor antibodies HGS-ETR1 (mapatumumab)
    and HGS-ETR2 (lexatumumab) from GSK. We have advanced HGS-ETR1
    to a proof-of-concept phase that currently includes three
    randomized chemotherapy combination trials to evaluate its
    potential in the treatment of specific cancers, including
    multiple myeloma, non-small cell lung cancer and hepatocellular
    cancer. We have also acquired the rights to develop and
    commercialize novel small-molecule inhibitors of IAP proteins
    that show substantial early promise in the treatment of a number
    of cancers. 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 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
    finances 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. Controlling net cash burn and
    maintaining a strong cash position will continue to be an
    important ongoing priority. 2




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Products
    Clinical
    Programs
  Late-Stage
    Products
    Albuferon
    (albinterferon alfa-2b)
      follow-up. follow-up.
       3




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800-mg
  LymphoStat-B
    (belimumab)
  ®
          ABthrax
    (raxibacumab)
  Bacillus anthracis
   4




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Oncology
    Products
    TRAIL
    Receptor Antibodies
      75-80%
  80-90%
   5




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IAP
    Inhibitors
      Products
    in the GSK Pipeline
    Darapladib
  2
      co-promotion
  Syncria®

    (albiglutide)
  GLP-1
 6




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GSK649868
    Research
    and Development
    Human
    Antibody Technology
      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. 7




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
    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
      Lead
    Commercial Collaborations
  Novartis
  Albuferon.
 8




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GlaxoSmithKline
  LymphoStat-B.
  Darapladib. Lp-PLA 2 co-promotion
  Syncria.
  TRAIL Receptor Antibodies. HGS-ETR1
  United
    States Government
  ABthrax. in vitro in vivo
 9




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Product
    Collaborations and Agreements
  Aegera Therapeutics.
  CoGenesys.
  Research
    and Technology Collaborations
  2010-2011.
  Process
    Development and Manufacturing Alliances
    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; 11




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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, manufacturing and commercialization
    activities.    Products.
  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.   12




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Marketing Approvals.
    Other Regulation.
    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.
  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 and manufacturing
    efforts.
    Because we will be disclosing data from three Phase 3 trials
    on our two lead products this year, 2009 will be a pivotal year
    for the Company.
    Because our product development efforts depend on new and
    rapidly-evolving 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.
   15




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We are continually evaluating our business strategy, and may
    modify this strategy in light of developments in our business
    and other factors.
        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.
     16




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
    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.  131
  and/or
  We face risks in connection with our ABthrax product in
    addition to risks generally associated with drug development.
   17




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in vitro in
    vivo
  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 ABthrax.
    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.
     18




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We reacquired rights to HGS-ETR1 from GSK, as well as all
    rights to other TRAIL Receptor 1 and 2 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 now depend on
    Tevas ability to develop and commercialize those
    assets.
    Because we currently depend on our collaboration partners for
    substantial revenue, we may not become profitable if we cannot
    increase the revenue from our collaboration partners or other
    sources.
     19




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
    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.
    Since reimbursement payments from our collaborators will pay
    for approximately half of our late-phase clinical trial
    expenses, our ability to develop and commercialize products may
    be impaired if payments from our collaborators are delayed.
    FINANCIAL
    AND MARKET RISKS
  Because of our substantial indebtedness, we may be unable to
    adjust our strategy to meet changing conditions in the
    future.
    
    payments of interest on, and principal of, our indebtedness will
    be substantial and may exceed then current income and available
    cash; 20




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
    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 debt when it becomes due.
    To become a successful biopharmaceutical company, we are
    likely to 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.
      
    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 costs of launching our products;
    the costs of commercializing our products, including marketing,
    promotional and sales costs;
    the commercial sources of our products;
    our stock price;
    our ability to establish and maintain collaboration partnerships; 21




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
    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.
    Some of our operating leases contain financial covenants,
    which may require us to accelerate payment under those
    agreements or increase the amount of our security deposits.
   22




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Our insurance policies are expensive and protect us only from
    some business risks, which could leave us exposed to
    significant, uninsured liabilities.
    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.
    If we are unable to protect our trade secrets, others may be
    able to use our secrets to compete more effectively.
   24




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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.
  Because we are subject to environmental, health and safety
    laws, we may be unable to conduct our business in the most
    advantageous manner.
    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.
      
    the quality and breadth of an organizations technology;
    the skill of an organizations employees and ability to
    recruit and retain skilled employees; 25




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
    an organizations intellectual property portfolio;
    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 we lose or are unable to attract key management or other
    personnel, we may experience delays in product development.
    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.
    We may be unable to successfully establish a manufacturing
    capability and may be unable to obtain required quantities of
    our Phase 3 and earlier development molecules economically.
   26




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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 currently have only a limited marketing
    capability, we may be unable to sell any of our products
    effectively.
    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.
    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 27




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
    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
    stockholder meetings.  Because our stock price has been and will likely continue to
    be 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, 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.   28




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ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES        ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   29




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


Low2007First Quarter

$
12.52


$
10.25Second Quarter

$
11.51


$
8.92Third Quarter

$
10.39


$
7.06Fourth Quarter

$
11.10


$
9.122008First Quarter

$
11.79


$
4.86Second Quarter

$
6.79


$
5.21Third Quarter

$
7.94


$
5.17Fourth Quarter

$
6.06


$
1.24       Comparison
    of 5 Year Cumulative Total Return
  
   30




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ITEM 6.
    SELECTED
    CONSOLIDATED FINANCIAL DATA    Years Ended December 31,2008


2007


2006


2005


2004(In thousands, except per share and ratio data)Statement of Operations Data:Revenue  research and development contracts

$
48,422


$
41,851


$
25,755


$
19,113


$
3,831Costs and expenses:Research and development


242,710



245,745



209,242



228,717



219,549General and administrative


60,865



55,874



53,101



42,066



35,728Lease termination and restructuring charges (credits)






(3,673
)


29,510







15,408Total costs and expenses


303,575



297,946



291,853



270,783



270,685Income (loss) from operations


(255,153
)


(256,095
)


(266,098
)


(251,670
)


(266,854
)Investment income


23,487



32,988



27,131



24,218



40,298Interest expense


(39,483
)


(39,341
)


(26,965
)


(12,085
)


(19,030
)Charge for impaired investments


(6,284
)














Gain on sale of long-term equity investments


32,518







14,759



1,302



255Gain (loss) on extinguishment of debt














(1,204
)


2,433Income (loss) before taxes


(244,915
)


(262,448
)


(251,173
)


(239,439
)


(242,898
)Provision for income taxes


















Net income (loss)

$
(244,915
)

$
(262,448
)

$
(251,173
)

$
(239,439
)

$
(242,898
)Net income (loss) per share, basic and diluted

$
(1.81
)

$
(1.95
)

$
(1.91
)

$
(1.83
)

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


















Coverage deficiency

$
(244,915
)

$
(262,448
)

$
(251,173
)

$
(239,439
)

$
(242,898
)   31




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ITEM 6.
    SELECTED
    CONSOLIDATED FINANCIAL DATA, CONTINUED  As of December 31,2008


2007


2006


2005


2004(In thousands)Balance Sheet Data:Cash, cash equivalents, short-term investments, marketable
    securities and restricted
    investments(1)

$
372,939


$
603,840


$
763,084


$
646,220


$
952,686Total
    assets(2)


674,164



949,105



1,149,668



997,046



1,249,385Total debt and lease financing, less current
    portion(2)


756,477



754,099



751,526



510,000



505,131Accumulated deficit


(2,127,744
)


(1,882,829
)


(1,620,381
)


(1,369,208
)


(1,129,769
)Total stockholders equity (deficit)


(241,375
)


(11,902
)


213,923



416,966



656,047     (1)
    
    Cash, cash equivalents, short-term investments, marketable
    securities and restricted investments for 2008, 2007,
    2006, 2005 and 2004 includes $69,360, $70,931, $61,165, $220,171
    and $215,236 respectively, of restricted investments relating to
    certain leases.(2)
    
    Total assets for 2008, 2007, 2006, 2005 and 2004
    includes $69,360, $70,931, $61,165, $220,171 and $215,236
    respectively, of restricted investments relating to certain
    leases. Total debt and lease financing, less current
    portion for 2008, 2007, 2006, 2005 and 2004 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. 32




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ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Overview
  ® ® tm
    ®
           33




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Overview
    (continued)
        Critical
    Accounting Policies and the Use of Estimates
      Investments. Accounting for Certain
    Investments in Debt and Equity Securities
 34




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Critical
    Accounting Policies and the Use of Estimates
    (continued)
    Fair Value Measurements
  Leases. 20-year
  Accounting For Leases:
    Sale-Leaseback Transactions Involving Real Estate
  Impairments of long-lived assets.
  Revenue. Revenue Recognition
    in Financial Statements Revenue Recognition 00-21 (EITF 00-21), Revenue Arrangements with Multiple Deliverables EITF 00-21
 35




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Critical
    Accounting Policies and the Use of Estimates
    (continued)
    ®
    Research and Development.
  Stock Compensation.
  Share-Based
    Payment
    Exit Accruals.
 36




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Results
    of Operations
  Years Ended December 31, 2008 and 2007
  Revenues.
    Expenses.
            project-by-project
 37




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Results
    of Operations (continued)
  Years Ended December 31, 2008 and 2007 (continued)
         14-1, Accounting for Convertible Debt Instruments That May Be
    Settled in Cash upon Conversion (Including Partial Cash
    Settlement) 14-1).
      Net Income (Loss).
  Years Ended December 31, 2007 and 2006
  Revenues.
 38




---



##### 



Results
    of Operations (continued)
  Years Ended December 31, 2007 and 2006 (continued)
     Expenses.
             39




---



##### 



Results
    of Operations (continued)
  Years Ended December 31, 2007 and 2006 (continued)
           Net Income (Loss).
  Liquidity
    and Capital Resources
       40




---



##### 



Liquidity
    and Capital Resources (continued)
        Clinical Trial Status as of
    December 31,(2)Product Candidate
    (1)

Indication

2008

2007

2006Albuferon

Hepatitis C

Phase 3(3)

Phase 3

Phase 3LymphoStat-B

Systemic Lupus Erythematosus

Phase 3

Phase 3

Phase 2(4)LymphoStat-B

Rheumatoid Arthritis

Phase 2(5)

Phase 2(5)

Phase 2(5)HGS-ETR1

Cancer

Phase 2

Phase 2

Phase 2HGS-ETR2

Cancer

Phase 1

Phase 1

Phase 1ABthrax

Anthrax

(6)

(6)

(6)HGS1029

Cancer

Phase 1

(7)

     (1)
    
    Includes only those candidates for which an Investigational New
    Drug (IND) application has been filed with the FDA.(2)
    
    Clinical Trial Status defined as when patients are being dosed.(3)
    
    Patient dosing completed during in 2008; some patients in follow
    up as of December 31, 2008.(4)
    
    Initial Phase 2 trial completed and Phase 3 enrollment initiated
    in 2006; patient dosing began in 2007.(5)
    
    Initial Phase 2 trial completed; extension safety study ongoing
    and further development under review.(6)
    
    We have begun delivery of ABthrax to the U.S. Strategic National
    Stockpile. We anticipate filing a Biologics License Application
    (BLA) in 2009.(7)
    
    IND filed in December 2007 with respect to HGS1029 (formerly
    AEG40826).   41




---



##### 



Liquidity
    and Capital Resources (continued)
                 42




---



##### 



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)

$
549.7


$
11.5


$
303.0


$
235.2


$
Long term lease commitment 
    BioMed(2)


495.1



26.1



49.6



51.6



367.8Operating
    leases(3)


398.9



21.5



43.8



45.1



288.5Unconditional purchase
    obligations(4)


7.1



7.1











ABthrax milestones and
    royalties(5)


10.3



10.3











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


















Total contractual cash
    obligations(7)

$
1,461.1


$
76.5


$
396.4


$
331.9


$
656.3     (1)
    
    Contractual interest obligations related to our convertible
    subordinated notes included above total $39.7 million as of
    December 31, 2008. Contractual interest obligations of
    $11.5 million, $23.0 million and $5.2 million are
    due in one year or less, two to three years and four to five
    years, respectively. In February 2009, we repurchased a portion
    of our convertible subordinated notes. This repurchase reduces
    the principal due in two to three years and four to five years
    by $82.9 million and $23.3 million, respectively.
    Contractual interest obligations due in one year or less, two to
    three years and four to five years are reduced by
    $2.1 million, $4.5 million and $0.4 million,
    respectively, as a result of the repurchase.(2)
    
    Contractual interest obligations related to BioMed are included
    above and aggregate $442.1 million as of December 31,
    2008. Contractual interest obligations of $26.1 million,
    $49.6 million, $51.6 million and $314.8 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 $360.9 million. Lease payments of
    $17.5 million, $36.1 million, $37.6 million and
    $269.7 million are due in one year or less, two to three
    years, four to five years and after five years, respectively.
    The operating lease obligations shown above are the gross
    amounts, not considering sublease income. Contractual sublease
    income of $4.5 million and $9.0 million is due in one
    year or less and two to three years, respectively. Certain of
    our operating leases contain financial covenants with respect to
    minimum levels of unrestricted cash, cash equivalents and
    marketable securities and minimum levels of net worth. During
    2007, we amended certain of these leases to eliminate the
    minimum net worth covenant and adjust the minimum levels of
    unrestricted cash, cash equivalents and marketable securities
    required under the leases. We also pledged additional collateral
    of approximately $8.6 million to certain lessors to satisfy
    the minimum net worth covenant associated with certain other
    leases. During 2008, approximately $4.9 million of this
    additional collateral was released, as the lease terms of the
    related leases expired.(4)
    
    Our unconditional purchase obligations relate to commitments for
    capital expenditures.(5)
    
    Includes milestone payments and royalties associated with the
    delivery of ABthrax to the U.S. Strategic National Stockpile.(6)
    
    In the event we reach certain development milestones for
    Albuferon and LymphoStat-B such as successful completion of
    Phase 3 trials or regulatory approval, we would be obligated to
    make payments of up to $11.5 million over the next five
    years. In the event we reach certain development milestones
    related to 43




---



##### 



Liquidity
    and Capital Resources (continued)
  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 $21.0 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 from the above
    table.(7)
    
    For additional discussion of our debt obligations and lease
    commitments, see Note I, Long-Term Debt and Note J,
    Commitments and Other Matters, of the Notes to the Consolidated
    Financial Statements.      Off-Balance
    Sheet Arrangements
       44




---



##### 



Safe
    Harbor Statement under the Private Securities Litigation Reform
    Act of 1995
   45




---



##### 



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK             46




---



##### 



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    (continued)    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 47




---



##### 



ITEM 9A.  CONTROLS
    AND PROCEDURES (continued)
  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.          ITEM 9B.
    OTHER
    INFORMATION   48




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  
                  49




---



##### 



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   50




---



##### 



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, 2008 and 2007


F-3Consolidated Statements of Operations for the years ended
    December 31, 2008, 2007 and 2006


F-4Consolidated Statements of Stockholders Equity (Deficit)
    for the years ended December 31, 2008, 2007 and 2006


F-5Consolidated Statements of Cash Flows for the years ended
    December 31, 2008, 2007 and 2006


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*

2000 Stock Incentive Plan, as amended (Filed as Exhibit A to the
    Registrants Definitive Proxy Statement on Schedule 14A
    filed April 18, 2001 and Annexes A and B to the
    Registrants Definitive Proxy Statement on Schedule 14A
    filed April 16, 2004).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). 51




---



##### 



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).10.10*

Lease Agreement between Maryland Economic Development
    Corporation and Human Genome Sciences, Inc. dated December 1,
    1999 (Filed as Exhibit 10.43 to the Registrants Form 10-K
    for the fiscal year ended December 31, 1999).10.11*

Omnibus Agreement between Maryland Economic Development
    Corporation, Wells Fargo Bank Northwest, National Association,
    Human Genome Sciences, Inc., Allfirst Bank, a division of
    M&T Bank and the other parties named therein dated June 26,
    2003 (Filed as Exhibit 10.1 to the Registrants Form 10-Q
    filed August 11, 2003).10.12*

Lease Agreement between Wells Fargo Bank Northwest, National
    Association as Trustee under Trust Agreement and Human Genome
    Sciences, Inc. dated October 25, 2001 (Filed as Exhibit 10.22 to
    the Registrants Form 10-K for the fiscal year ended
    December 31, 2001 and amended by Exhibit 10.15 hereto).10.13*

Cash Collateral Pledge Agreement between Human Genome Sciences,
    Inc., Allfirst Bank and Allfirst Trust Company National
    Association dated October 25, 2001 (Filed as Exhibit 10.23 to
    the Registrants Form 10-K for the fiscal year ended
    December 31, 2001).10.14*

Guarantee by Human Genome Sciences, Inc. as Guarantor in favor
    of Allfirst Bank, as Agent dated October 25, 2001 (Filed as
    Exhibit 10.24 to the Registrants Form 10-K for the fiscal
    year ended December 31, 2001 and amended by Exhibit 10.15
    hereto).10.15*

Amendment No. 1 dated March 29, 2002 to Lease Agreement between
    Wells Fargo Bank Northwest, National Association as Trustee
    under Trust Agreement and Human Genome Sciences, Inc. dated
    October 25, 2001 (Filed as Exhibit 10.25 to the
    Registrants Form 10-K for the fiscal year ended December
    31, 2001).10.16*

Amendment No. 1 dated March 29, 2002 to Guarantee by Human
    Genome Sciences, Inc. as Guarantor in favor of Allfirst Bank, as
    Agent dated October 25, 2001 (Filed as Exhibit 10.26 to the
    Registrants Form 10-K for the fiscal year ended
    December 31, 2001).10.17*

Form of Restricted Stock Agreement (Filed as Exhibit 10.20 to
    the Registrants Form 10-Q filed August 1, 2005).10.18*

Form of Stock Option Agreement (Filed as Exhibit 10.2 to
    the Registrants
    Form 8-K
    filed September 20, 2004).10.19*

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).10.20*

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).10.21*

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).10.22*

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).10.23*

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).10.24*

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).10.25

Co-development and Commercialization Agreement between Glaxo
    Group Limited and Human Genome Sciences, Inc., dated August 1,
    2006.10.26

Second Amendment to the Employment Agreement by and between
    Human Genome Sciences, Inc. and H. Thomas Watkins.10.27

Form of First Amendment to Executive Agreement. 52




---



##### 



ExhibitNo.10.28

Form of First Amendment to the Registrants Second Amended
    and Restated Key Executive Severance Plan.12.1

Ratio of Earnings to Fixed Charges.21.1

Subsidiaries.23.1

Consent of Ernst & Young LLP, Independent Registered Public
    Accounting Firm.31i.1

Rule 13a-14(a) Certification of Principal Executive Officer.31i.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. 53




---



##### 



SIGNATURES
      BY: /s/  H.
    Thomas Watkins         Signature

Title

Date/s/  H.
    Thomas WatkinsH.
    Thomas Watkins

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

February 26, 2009/s/  Timothy
    C.  BarabeTimothy
    C.  Barabe

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

February 26, 2009/s/  Argeris
    N. Karabelas, Ph.D.Argeris
    N. Karabelas, Ph.D.

Chairman of the Board

February 26, 2009/s/  Richard
    J. DanzigRichard
    J. Danzig

Director

February 26, 2009/s/  Jürgen
    Drews, M.D.Jürgen
    Drews, M.D.

Director

February 26, 2009/s/  Maxine
    Gowen, Ph.D.Maxine
    Gowen, Ph.D.

Director

February 26, 2009/s/  Tuan
    Ha-NgocTuan
    Ha-Ngoc

Director

February 26, 2009/s/  John
    LaMattina, Ph.D.John
    LaMattina

Director

February 26, 2009/s/  Augustine
    LawlorAugustine
    Lawlor

Director

February 26, 2009/s/  David
    SouthwellDavid
    Southwell

Director

February 26, 2009/s/  Robert
    C. YoungRobert
    C. Young, M.D.

Director

February 26, 2009  54




---



##### 



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


F-2Consolidated Balance Sheets at December 31,
    2008 and 2007


F-3Consolidated Statements of Operations for the
    years ended December 31, 2008, 2007 and 2006


F-4Consolidated Statements of Stockholders
    Equity (Deficit) for the years ended December 31, 2008,
    2007 and 2006


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2008, 2007 and 2006


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 31,2008


2007(dollars in thousands, except share and per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
15,248


$
34,815Short-term investments


22,691



93,952Collaboration receivables


24,880



38,672Prepaid expenses and other current assets


5,347



5,687Total current assets


68,166



173,126Marketable securities


265,640



404,142Long-term equity investments


2,606



18,245Property, plant and equipment (net of accumulated depreciation
    and amortization)


259,269



268,804Restricted investments


69,360



70,931Other assets


9,123



13,857TOTAL ASSETS

$
674,164


$
949,105LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Accounts payable and accrued expenses

$
55,434


$
62,876Accrued payroll and related taxes


18,574



14,448Accrued exit expenses


2,952



3,627Deferred revenues


43,746



45,219Total current liabilities


120,706



126,170Convertible subordinated debt


510,000



510,000Lease financing


246,477



244,099Deferred revenues, net of current portion


29,563



73,049Accrued exit expenses, net of current portion


2,075



3,017Other liabilities


6,718



4,672Total liabilities


915,539



961,007Stockholders 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 135,739,978 and 134,936,512 at December 31,
    2008 and 2007, respectively


1,357



1,349Additional paid-in capital


1,889,502



1,866,426Accumulated other comprehensive income (loss)


(4,490
)


3,152Accumulated deficit


(2,127,744
)


(1,882,829
)Total stockholders deficit


(241,375
)


(11,902
)TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT

$
674,164


$
949,105    F-3




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2008


2007


2006(dollars in thousands, except share and per share amounts)Revenue  research and development contracts

$
48,422


$
41,851


$
25,755Costs and expenses:Research and development


242,710



245,745



209,242General and administrative


60,865



55,874



53,101Lease termination and restructuring charges (credits)






(3,673
)


29,510Total costs and expenses


303,575



297,946



291,853Income (loss) from operations


(255,153
)


(256,095
)


(266,098
)Investment income


23,487



32,988



27,131Interest expense


(39,483
)


(39,341
)


(26,965
)Charge for impaired investments


(6,284
)






Gain on sale of long-term equity investment


32,518







14,759Income (loss) before taxes


(244,915
)


(262,448
)


(251,173
)Provision for income taxes










Net income (loss)

$
(244,915
)

$
(262,448
)

$
(251,173
)Basic and diluted net income (loss) per share

$
(1.81
)

$
(1.95
)

$
(1.91
)Weighted average shares of common stock outstanding, basic and
    diluted


135,406,642



134,333,418



131,815,414    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(dollars in thousands, except share amounts)Balance  December 31, 2005


131,049,798


$
1,310


$
1,786,549


$
(1,685
)

$
(1,369,208
)

$
416,966Comprehensive income (loss):Net loss


















(251,173
)


(251,173
)Unrealized loss on investments














(1,927
)






(1,927
)Cumulative translation adjustment














18







18Comprehensive loss






















(253,082
)Shares of common stock issued pursuant to stock-based
    compensation plans


2,770,255



28



23,405











23,433Stock-based compensation expense










26,606











26,606Balance  December 31, 2006


133,820,053



1,338



1,836,560



(3,594
)


(1,620,381
)


213,923Comprehensive income (loss):Net loss


















(262,448
)


(262,448
)Unrealized gain on investments














6,724







6,724Cumulative translation adjustment














22







22Comprehensive loss






















(255,702
)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



1,866,426



3,152



(1,882,829
)


(11,902
)Comprehensive income (loss):Net loss


















(244,915
)


(244,915
)Unrealized loss on investments














(7,052
)






(7,052
)Cumulative translation adjustment














(590
)






(590
)Comprehensive loss






















(252,557
)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


$
1,889,502


$
(4,490
)

$
(2,127,744
)

$
(241,375
)    F-5




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2008


2007


2006(dollars in thousands)Cash flows from operating activities:Net income (loss)

$
(244,915
)

$
(262,448
)

$
(251,173
)Adjustments to reconcile net income (loss) to net cash used in
    operating activities:Stock-based compensation


18,593



21,691



26,606Depreciation and amortization


21,350



22,114



20,105Gain on sale of long-term equity investment


(32,518
)






(14,759
)Charge for impaired investments


6,284







Charge (credit) for lease termination and restructuring






(1,969
)


28,953Gain on sale of building






(1,704
)


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


581



(4,631
)


(5,607
)Non-cash expense and other


1,981



2,995



5,307Non-cash reimbursement of CoGenesys expenses










(4,818
)Changes in operating assets and liabilities:Collaboration receivables


13,792



25,807



(16,279
)Prepaid expenses and other assets


2,760



(366
)


5,292Accounts payable and accrued expenses


(7,247
)


25,770



9,281Accrued payroll and related taxes


4,126



(930
)


1,539Accrued exit expenses


(2,083
)


(2,376
)


(5,006
)Deferred revenues


(44,959
)


(633
)


54,591Other liabilities


1,992



2,021



(1,162
)Net cash used in operating activities


(260,263
)


(174,659
)


(147,130
)Cash flows from investing activities:Purchase of short-term investments and marketable securities


(15,065
)


(160,379
)


(538,314
)Proceeds from sale and maturities of short-term investments and
    marketable securities


211,722



278,031



504,970Proceeds from sale of long-term equity investments


47,336







24,127Capital expenditures  property, plant and equipment


(9,724
)


(3,042
)


(9,719
)Release of restricted investments


4,877







Proceeds from sale of building, net of transaction costs






14,824



Purchase of building, net of transaction costs






(13,120
)


Purchase of long-term equity investment






(3,148
)


Capitalized interest










(2,527
)Net cash provided by (used in) investing activities


239,146



113,166



(21,463
)Cash flows from financing activities:Payments on long-term debt










(3,120
)Proceeds from sale and maturities of restricted investments


26,120



17,857



57,670Purchase of restricted investments


(28,897
)


(26,642
)


(44,968
)Proceeds from issuance of common stock


4,432



8,151



23,433Treasury stock (net of expense)


(105
)






Proceeds from sale-leaseback of property, plant and equipment










220,252Net cash provided by (used in) financing activities


1,550



(634
)


253,267Net increase (decrease) in cash and cash equivalents


(19,567
)


(62,127
)


84,674Cash and cash equivalents  beginning of year


34,815



96,942



12,268Cash and cash equivalents  end of year

$
15,248


$
34,815


$
96,942  F-6




---



##### 



SUPPLEMENTAL
    DISCLOSURES OF CASH FLOW INFORMATION, NON-CASH OPERATING,
    INVESTING AND FINANCING ACTIVITIES
  Year Ended December 31,2008


2007


2006(dollars in thousands)Cash paid during the year for:Interest

$
34,729


$
34,319


$
25,540Income taxes

$



$



$
                  F-7




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and 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.
 F-8




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  
 Cash
    Equivalents, Short-term Investments, Marketable Securities,
    Long-term Equity Investments and Restricted Investments
    (continued)
    Investment
    Risk
  sub-prime
  Other-Than-Temporary
    Impairment of Investments
  other-than-temporary No. 115-1, The Meaning of
    Other-Than-Temporary
    Impairment and Its Application to Certain Investments
  Depreciation
    and Amortization
    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
  Accounting for the
    Impairment or Disposal of Long-Lived Assets
  Fair
    Value of Financial Instruments
   F-9




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  
 Fair
    Value of Financial Instruments (continued)
      Leases
  Accounting for Leases,
  Stock-Based
    Compensation
  Share-Based
    Payment
  Revenue
    Recognition
     F-10




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  
 Revenue
    Recognition (continued)
      Research
    and Development
  No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or
    Services Received for Use in Future Research and Development
    Activities
  Financing
    Costs Related to Long-term Debt
    Patent
    Application Costs
    Capitalization
    of Interest
    Net
    Income (Loss) Per Share
  Earnings Per Share
  Foreign
    Currency
   F-11




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  Comprehensive
    Income (Loss)
  Reporting Comprehensive Income available-for-sale
    December 31,2008


2007


2006Net unrealized gains (losses) on:Short-term investments and marketable securities

$
(4,077
)

$
2,882


$
(3,036
)Long-term equity investment in VIA Pharmaceuticals


38



279



619Restricted investments


108



(39
)


(1,185
)Foreign currency translation


(559
)


30



8Accumulated other comprehensive income (loss)

$
(4,490
)

$
3,152


$
(3,594
)         Recent
    Accounting Pronouncements
  No. 07-1, Accounting for Collaborative Agreements No. 07-1). No. 07-1 No. 07-1
  Fair Value Measurements
  14-1, Accounting for Convertible Debt Instruments That May Be
    Settled in Cash upon Conversion (Including Partial Cash
    Settlement) 14-1). 14-1
 F-12




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE B) 
    Summary
    of Significant Accounting Policies (continued)  
 Recent
    Accounting Pronouncements (continued)
  14-1 14-1 14-1 14-1.
  No. 07-5, Determining Whether an Instrument (or Embedded Feature) Is
    Indexed to an Entitys Own Stock No. 07-5). No. 07-5 No. 07-5
  Sources
    of Supply
   F-13




---



##### 



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


265,640Investment in VIA Pharmaceuticals






19







19Cash 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


$
5,003


$
(9,875
)

$
357,710   December 31, 2007Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


ValueU.S. Treasury and agencies

$
2,028


$
12


$



$
2,040Government-sponsored enterprise securities


27,554



1,065



(127
)


28,492Corporate debt securities


64,072



12



(664
)


63,420Subtotal  Short-term investments


93,654



1,089



(791
)


93,952U.S. Treasury and agencies


29,417



689







30,106Government-sponsored enterprise securities


174,937



2,766



(608
)


177,095Corporate debt securities


197,205



1,381



(1,645
)


196,941Subtotal  Marketable securities


401,559



4,836



(2,253
)


404,142Investment in VIA Pharmaceuticals






259







259Cash and cash equivalents


10,158











10,158U.S. Treasury and agencies


7,049



38







7,087Government-sponsored enterprise securities


19,030



51



(51
)


19,030Corporate debt securities


34,732



101



(177
)


34,656Subtotal  Restricted investments


70,969



190



(228
)


70,931Total

$
566,182


$
6,374


$
(3,272
)

$
569,284  F-14




---



##### 



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


$
22Corporate debt securities


6,543



284



145



13



6,688



297Subtotal  Short-term investments


6,543



284



1,107



35



7,650



319U.S. Treasury and agencies


7,540



455











7,540



455Government-sponsored enterprise securities


1,714



4



11,259



258



12,973



262Corporate debt securities


77,637



4,597



39,334



3,554



116,971



8,151Subtotal  Marketable securities


86,891



5,056



50,593



3,812



137,484



8,868Government-sponsored enterprise securities


2,975



5



337



6



3,312



11Corporate debt securities


19,002



637



4,016



40



23,018



677Subtotal  Restricted investments


21,977



642



4,353



46



26,330



688Total

$
115,411


$
5,982


$
56,053


$
3,893


$
171,464


$
9,875   F-15




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE C) 
    Investments
    (continued)  
 Short-term
    investments, Marketable securities and Restricted
    investments  unrealized losses (continued)
  December 31, 2007Loss 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

$



$



$
4,211


$
127


$
4,211


$
127Corporate debt securities










57,293



664



57,293



664Subtotal  Short-term investments










61,504



791



61,504



791Government-sponsored enterprise securities










24,366



608



24,366



608Corporate debt securities


53,674



1,523



12,498



122



66,172



1,645Subtotal  Marketable securities


53,674



1,523



36,864



730



90,538



2,253Government-sponsored enterprise securities










11,685



51



11,685



51Corporate debt securities


1,951



29



15,583



148



17,534



177Subtotal  Restricted investments


1,951



29



27,268



199



29,219



228Total

$
55,625


$
1,552


$
125,636


$
1,720


$
181,261


$
3,272   other-than-temporary
  available-for-sale
   F-16




---



##### 



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


Marketable


RestrictedInvestments


Securities


InvestmentsAmortized


Fair


Amortized


Fair


Amortized


FairMaturities

Cost


Value


Cost


Value


Cost


ValueLess than one year

$
22,683


$
22,691


$



$



$
23,580


$
23,666Due in year two through year three










258,119



253,103



38,150



38,058Due in year four through year five










7,697



7,671



6,425



6,451Due after five years










4,832



4,866



1,096



1,185Total

$
22,683


$
22,691


$
270,648


$
265,640


$
69,251


$
69,360       Year Ended December 31,2008


2007


2006Net proceeds on sale of investments prior to maturity

$
237,861


$
123,522


$
334,250Realized gains


34,113



494



14,888Realized losses


(494
)


(439
)


(767
)       (NOTE D) 
    Collaborations
    and U.S. Government Agreement  Principal
    Agreements
  Agreement
    with Novartis
  ®
 F-17




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE D) 
    Collaborations
    and U.S. Government Agreement (continued)  
 Principal
    Agreements (continued)
  
 Agreement
    with Novartis (continued)
    Agreements
    with GlaxoSmithKline (formerly SmithKline Beecham
    Corporation)
  co-development
      Accounting for Nonmonetary Transactions Exchanges of Nonmonetary Assets an amendment to APB Opinion No. 29
  ®
 F-18




---



##### 



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




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and 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-20




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
  (NOTE E) 
    Collaboration
    Receivables    (NOTE F) 
    Property,
    Plant and Equipment    December 31,2008


2007Building (Large-Scale Manufacturing Facility)

$
187,737


$
187,737Laboratory and production equipment


88,226



82,836Computer equipment and software


36,249



33,761Land and improvements


30,521



30,521Leasehold improvements


23,932



22,589Furniture and office equipment


6,007



5,908Construction-in-progress


3,793



3,419376,465



366,771Less: accumulated depreciation and amortization


(117,196
)


(97,967
)$
259,269


$
268,804     (NOTE G) 
    Other
    Assets    December 31,2008


2007Deferred financing costs, net of accumulated amortization of
    $8,853 and $6,539, as of December 31, 2008 and 2007,
    respectively

$
8,808


$
11,122Other assets


315



2,735$
9,123


$
13,857    F-21




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
  (NOTE H) 
    Accounts
    Payable and Accrued Expenses    December 31,2008


2007Clinical trial costs

$
40,212


$
46,848Accrued expenses and fixed asset purchases


6,091



6,844Professional fees


5,878



5,940Accrued interest


3,253



3,244$
55,434


$
62,876     (NOTE I) 
    Long-Term
    Debt    December 31,Debt

Interest Rate


Maturities


2008


20072.25% Convertible Subordinated Notes due 2011


2.25
%


October 2011


$
280,000


$
280,0002.25% Convertible Subordinated Notes due 2012


2.25
%


August 2012



230,000



230,000510,000



510,000BioMed lease financing


11.0
%


May 2026



246,477



244,099756,477



754,099Less current portion














$
756,477


$
754,099     2009

$
2010


2011


280,0002012


230,0002013


2014 and thereafter


52,961$
562,961    F-22




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE I) 
    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
    December 31,2008


2007Carrying


Fair


Carrying


FairAmount


Value


Amount


Value2.25% Convertible Subordinated Notes due 2011

$
280,000


$
86,800


$
280,000


$
266,0002.25% Convertible Subordinated Notes due 2012


230,000



57,500



230,000



198,950BioMed lease financing


246,477



306,446



244,099



244,099$
756,477


$
450,746


$
754,099


$
709,049  F-23




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE I) 
    Long-Term
    Debt (continued)  1 4 1 4
          (NOTE J) 
    Commitments
    and Other Matters  Leases
    Gross





NetOperating


Sublease


OperatingYear Ending December 31,

Leases


Income


Leases2009

$
21,495


$
(4,555
)

$
16,9402010


21,754



(4,646
)


17,1082011


22,011



(4,342
)


17,6692012


22,371







22,3712013


22,739







22,7392014 and thereafter


288,495







288,495$
398,865


$
(13,543
)

$
385,322      F-24




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE J) 
    Commitments
    and Other Matters (continued)  
 Leases
    (continued)
                Guarantors Accounting and Disclosure
    Requirements for Guarantees, Including Indirect Guarantees of
    the Indebtedness of Others
 F-25




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE J) 
    Commitments
    and Other Matters (continued)  
 Leases
    (continued)
        Capital
    Expenditures
    401(k)
    Plan
    Contingent
    Liabilities
       F-26




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
  (NOTE K) 
    Stockholders
    Equity  Stock-based
    Compensation Plans
    Year Ended December 31,2008


2007


2006Employee stock option and employee stock purchase plan
    compensation expense

$
17,630


$
20,691


$
26,095Restricted stock awards


316



530



511Restricted stock units


647



470



Total

$
18,593


$
21,691


$
26,606     Stock
    Incentive Plan
     F-27




---



##### 



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

Weighted-AverageAverage

Remaining

AggregateExercise

Contractual Term

IntrinsicShares

Price

(Years)

Value(1)Outstanding at January 1, 2008


28,121,529


$
17.44



5.47Granted


4,563,966



5.31Exercised


(364,236
)


9.45






$
720Forfeited


(477,114
)


9.22Expired


(3,470,994
)


20.12Outstanding at December 31, 2008


28,373,151



15.40



5.71



27Vested or expected to vest at December 31, 2008


27,264,831



15.71



4.18



23Exercisable at December 31, 2008


20,971,979



18.04



4.69     (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, 2008, or for exercised options, the exercise
    date.    Options Outstanding

Options ExercisableWeighted-AverageRemaining

Weighted-Average



Weighted-AverageNumber

Contractual

Exercise

Number

ExerciseRange of Exercise Price

Outstanding

Life (In Years)

Price

Exercisable

Price$1.31 to $10.00


7,254,070



7.51


$
6.79



3,092,722


$
8.33$10.01 to $12.50


10,877,073



6.69



11.07



7,861,521



11.20$12.51 to $15.00


5,031,623



4.93



12.79



4,809,707



12.78$15.01 to $20.00


795,165



3.51



17.14



792,809



17.15$20.01 to $86.19


4,415,220



1.59



42.91



4,415,220



42.9128,373,151



5.71



15.40



20,971,979



18.04      F-28




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE K) 
    Stockholders
    Equity (continued)  
 Stock-based
    Compensation Plans (continued)
  
 Stock
    Incentive Plan (continued)
          Years Ended December 31,2008

2007

2006Expected life:Stock options

5.4 years

5.0 years

4.9 yearsEmployee stock purchase plan rights

1.0 years

1.0 years

1.0 yearsInterest rate

1.2% - 3.6%

3.4% - 4.9%

4.3% - 5.1%Volatility

41.9% - 57.3%

40.3% - 48.0%

38.0% - 48.0%Dividend yield

0%

0%

0%     Expected Life of Stock-based Awards
  Interest Rate
  Volatility
  Dividend Yield
  Restricted
    Stock
   F-29




---



##### 



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


ValueRestricted stock at January 1, 2008


324,987


$
11.21Granted


78,608



4.92Vested


(96,204
)


11.61Forfeited


(69,415
)


11.56Restricted stock at December 31, 2008


237,976



8.87Expected to vest at December 31, 2008


207,039



8.87     Employee
    Stock Purchase Plan
    (NOTE L) 
    Preferred
    Share Purchase Rights   F-30




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
  (NOTE M) 
    Income
    Taxes    Year Ended December 31,2008


2007


2006Federal income tax provision at 34%

$
(83,271
)

$
(89,232
)

$
(85,399
)Change in state income tax rate






(15,762
)


State taxes, net of federal tax benefit


(12,857
)


(11,638
)


(11,041
)Tax credits, principally for research and development


(3,500
)


(2,911
)


(7,305
)Stock option deduction for which no book benefit is available










Other


3,447



3,585



4,146Increase in valuation allowance on deferred tax asset


96,181



115,958



99,599$



$



$
       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






8,352Reserves and accruals


7,964



10,555Other






37925,614



855,925Less valuation allowance


(25,614
)


(855,925
)$



$
   F-31




---



##### 



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


Long-TermAsset


Asset/(Liability)December 31, 2007Net operating loss carryforward

$



$
651,745Research and development and other tax credit carryforwards






30,218Capital loss carryforward






13,528Deferred revenue


17,837



28,814Facility exit charge






5,067Net unrealized gains on investments






(1,205
)Intangible assets


394



5,391Equity based compensation






8,700Depreciation






5,189Reserves and accruals


2,857



11,984Other






2,08121,088



761,512Less valuation allowance


(21,088
)


(761,512
)$



$
       Year Ended December 31,2008


2007


2006Current:Federal


$



$



$State










Foreign taxes










Deferred










$



$



$     Accounting for Uncertainty in Income
    Taxes  An Interpretation of FASB Statement
    No. 109
 F-32




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE M) 
    Income
    Taxes (continued)      2008


2007Balance as of January 1

$
29,611


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


(496
)


Gross increases related to current year tax positions


1,167



970Balance as of December 31

$
30,282


$
29,611     (NOTE N) 
    Facility-Related
    Exit Costs        Accounting for Costs Associated with
    Exit Or Disposal Activities
   F-33




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE N) 
    Facility-Related
    Exit Costs (continued)        Balance as of January 1, 2008

$
6,644Accretion recorded


466Subtotal


7,110Cash paid


(2,083
)Balance as of December 31, 2008


5,027Less current portion


(2,952
)$
2,075    (NOTE O) 
    Fair
    Value Measurements      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.
    F-34




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE O) 
    Fair
    Value Measurements (continued)    Fair Valueas of


Fair Value Measurements as of December 31, 2008December 31,


Using Fair Value HierarchyDescription

2008


Level 1


Level 2


Level 3Cash and cash equivalents

$
15,248


$
15,248


$



$
Short-term investments


22,691



782



21,909



Marketable securities


265,640



16,063



249,577



Long-term equity investment


19



19







Restricted investments


69,360



11,912



57,448



Total

$
372,958


$
44,024


$
328,934


$
       sub-prime
    (NOTE P) 
    Teva Biopharmaceuticals USA, Inc. (formerly
    CoGenesys)
     F-35




---



##### 



HUMAN
    GENOME SCIENCES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (dollars in thousands, except share and per share data)
   (NOTE P) 
    Teva Biopharmaceuticals USA, Inc. (formerly CoGenesys)
    (continued)
        (NOTE Q) 
    Net
    Loss Per Share    Year Ended December 31,2008


2007


2006Numerator:Net loss

$
(244,915
)

$
(262,448
)

$
(251,173
)Denominator:Denominator for basic and diluted earnings
    per share  weighted-average shares


135,406,642



134,333,418



131,815,414Net loss per share, basic and diluted:Net loss per share

$
(1.81
)

$
(1.95
)

$
(1.91
)     (NOTE R) 
    Related
    Parties   F-36




---



##### 



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

    Quarter


2nd

    Quarter


3rd

    Quarter


4th

    Quarter2008Revenue

$
12,275


$
11,567


$
11,674


$
12,906Income (loss) from operations


(76,290
)


(70,220
)


(58,173
)


(50,470
)Net income (loss)


(46,916
)


(74,190
)


(68,113
)


(55,696
)Net income (loss) per share, basic and diluted


(0.35
)


(0.55
)


(0.50
)


(0.41
)2007Revenue

$
9,262


$
9,007


$
11,056


$
12,526Income (loss) from operations


(49,886
)


(49,864
)


(65,434
)


(90,911
)Net income (loss)


(51,029
)


(51,269
)


(67,257
)


(92,893
)Net income (loss) per share, basic and diluted


(0.38
)


(0.38
)


(0.50
)


(0.69
)          F-37