Human Genome Sciences Inc. (NASDAQ: HGSI) rejected an unsolicited takeover offer from partner GlaxoSmithKline plc (LSE:GSK; NYSE:GSK) for $13 per share, or about $2.6 billion in cash. The price is an 81% premium to Human Genome's close of $7.17 on Wednesday, before the offer was announced. Human Genome, which said the offer did not reflect its "inherent" value, retained Goldman Sachs and Credit Suisse to assist in exploring strategic alternatives, including a potential sale. The biotech also requested additional information on products out-licensed to GSK, including darapladib and albiglutide, which are in Phase III testing to treat coronary heart disease and Type II diabetes, respectively.
Human Genome and GSK originally partnered in 1993 to develop products based on genes identified by the biotech. Last March, the partners launched the first approved product developed under the deal, lupus drug Benlysta belimumab. Human Genome reported 2011 revenue of $131 million, including $52.3 million recognized from sales of Benlysta. The biotech has not provided 2012 sales guidance for Benlysta.
GSK said the acquisition would simplify R&D and commercial operations associated with the partnered programs. The pharma said it would realize at least $200 million in cost synergies by 2015. Skadden, Arps, Slate, Meagher & Flom and DLA Piper are legal counsel for Human Genome. Lazard and Morgan Stanley are advising GSK, and Cleary Gottlieb Steen & Hamilton and Wachtell, Lipton, Rosen & Katz are legal counsel for the pharma. Human Genome was up $7 (98%) to $14.17 on Thursday
