Advertisement

If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)

ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.

ENJOY UNLIMITED ACCES TO C&EN

Business

Human Genome Sciences Bows To GlaxoSmithKline’s $3 Billion Bid

Acquisitions: Deal caps nearly 20-year partnership of the two firms

by Rick Mullin
July 17, 2012

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.

Advertisement

Article:

This article has been sent to the following recipient:

0 /1 FREE ARTICLES LEFT THIS MONTH Remaining
Chemistry matters. Join us to get the news you need.