Web Date: July 17, 2012
Human Genome Sciences Bows To GlaxoSmithKline’s $3 Billion Bid
Human Genome Sciences has agreed to be purchased by GlaxoSmithKline in a transaction valued at about $3 billion. The decision marks HGS’s failure to attract a higher bid after it rejected a $2.6 billion overture by the British drug firm in April. After turning down that initial bid by GSK, HGS hired Goldman Sachs and Credit Suisse to explore options.
Under the agreement, GSK will attain full ownership of Benlysta, a monoclonal antibody developed with HGS and approved last year for the treatment of lupus, an autoimmune disorder. The drug is the only commercial product that has resulted from a partnership between the two firms dating back to 1993, two years after HGS’s founding. The companies have two other drugs in Phase III clinical trials: albiglutide, to treat type 2 diabetes, and darapladib, to treat heart disease.
“After a thorough analysis of strategic alternatives, HGS has determined that a combination with GSK is the best course of action for our company and the best way to maximize value for our stockholders,” says H. Thomas Watkins, CEO of HGS.
Andrew Witty, CEO of GSK, calls the deal a “natural next step in our nearly 20-year relationship with HGS.” GSK says the deal will allow it to simplify and optimize R&D, manufacturing, and commercialization operations. GSK expects to achieve $200 million in cost savings by 2015.
According to the agreement, GSK will pay $14.25 per share in cash, which is almost double HGS’s closing price of $7.17 per share on April 18, 2012, the last day of trading before HGS publicly disclosed GSK’s initial offer.
The deal follows a short run of contentious attempts by drug companies to acquire biotech firms, including Sanofi’s six-month wrangle to acquire Genzyme, a deal that closed in February, and Roche’s failed hostile bid for the gene-sequencing firm Illumina.
- Chemical & Engineering News
- ISSN 0009-2347
- Copyright © American Chemical Society