GlaxoSmithKline has made an offer to acquire Human Genome Sciences for $2.6 billion in cash. The price reflects an 81% premium to the last closing price of the stock. HGS' board rejected the initial offer, and is seeking strategic alternatives.
GSK and HGS collaborated on Benlysta, which was recently approved by the FDA to treat lupus. The companies are also working on other projects, including darapladib, a heart treatment currently in Phase III. GSK and HGS currently split Benlysta revenues evenly; the acquisition would give GSK full control over the revenues. It's not clear if a change-of-control clause would give GSK a greater share of revenues in the event that HGS is bought by another company.
Sir Andrew Witty, GSK's chief executive officer, commented, "The transaction is well aligned with our long-term strategy of delivering sustainable growth, simplifying GSK’s business model, enhancing R&D returns and deploying our capital with discipline. GSK is uniquely positioned to realize the full value of Benlysta, albiglutide, darapladib and Human Genome Sciences’s other assets for the benefit of physicians, patients and shareholders. Through complete ownership, we can simplify and optimize R&D, commercial and manufacturing operations to advance these products most effectively and efficiently while securing the full potential long-term value of the assets."
He added that GSK would achieve a minimum of $200 million in cost synergies by 2015
GSK Bids for Human Genome Sciences
By Gil Roth
Published April 19, 2012
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