GlaxoSmithKline pays $3bn for lupus drug partner
US biotech Human Genome Sciences accepts $14.25 a share after resisting advances of Europe's largest drug firm for months
http://www.guardian.co.uk/business/2012/jul/16/glaxosmithkline-human-genome-sciences-benlysta?newsfeed=true
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Email Julia Kollewe
guardian.co.uk, Monday 16 July 2012 15.41 BST
GSK's chief executive, Sir Andrew Witty, right, says of the deal: 'We are pleased to have reached a mutually beneficial agreement with HGS on friendly terms.' Photograph: Martin Godwin for the Guardian
GlaxoSmithKline has gained full control of lupus drug Benlysta after snapping up Human Genome Sciences in a negotiated $3bn deal, following three months of hostile pursuit of its long-term US partner.
Europe's largest pharmaceutical manufacturer agreed to pay $14.25 (£9.13) a share in cash for the US biotech, which until recently had steadfastly resisted its advances. The boards of both companies have approved the deal.
GSK had initially offered to pay $13 a share, valuing HGS at $2.6bn. It went directly to the US firm's shareholders with a tender offer in May, after HGS adopted a poison pill to thwart the bid. The US biotech also approached other large drug-makers about a takeover.
The price is double the $7.17 the Human Genome share price traded at before GSK's bid was made public in April.
In a near 20-year partnership, GSK and HGS developed and sold Benlysta, the first lupus drug in half a century. An estimated 1.6 million people in the world have lupus.
The two companies also co-operate in the development of two other medicines for diabetes and heart disease. The Maryland-based biotech uses the human gene map to develop protein and antibody drugs.
GSK's chief executive, Sir Andrew Witty, said: "We are pleased to have reached a mutually beneficial agreement with HGS on friendly terms and believe the combination of GSK and HGS represents clear financial and strategic logic for both companies and our respective shareholders."
His counterpart Thomas Watkins said: "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 maximise value for our stockholders."
Despite bumping its offer 10% and paying a 99% premium to the share price before its interest was made public, industry analysts said GSK had got a good deal – to the frustration of Human Genome investors hoping for a price in the high-teens a share.
"I'm disappointed with the deal because I think Benlysta is actually going to be a good drug," said Carol Werther, an analyst at Summer Street Research. "Glaxo wanted to get this on the cheap and they were able to do it in the absence of other bidders."
GSK said it expected to achieve cost savings of at least $200 m by 2015.
Navid Malik, an industry analyst at Cenkos Securities, said the deal was "nice to have" rather than a need to have for GSK, whose $112bn market value dwarves that of Human Genome.
Shares in GSK were up 0.66% at £14.55 at the close of trading in London.
The drug industry has seen a flurry of deals recently, driven by big pharmaceutical companies' hunt for new medicines as many of their blockbuster drugs lose patent protection. In a two-stage deal, AstraZeneca teamed up with its US partner Bristol-Myers Squibb last month to buy diabetes drug developer Amylin for $7bn
US biotech Human Genome Sciences accepts $14.25 a share after resisting advances of Europe's largest drug firm for months
US biotech Human Genome Sciences accepts $14.25 a share after resisting advances of Europe's largest drug firm for months
http://www.guardian.co.uk/business/2012/jul/16/glaxosmithkline-human-genome-sciences-benlysta?newsfeed=true
Share 1
Email Julia Kollewe
guardian.co.uk, Monday 16 July 2012 15.41 BST
GSK's chief executive, Sir Andrew Witty, right, says of the deal: 'We are pleased to have reached a mutually beneficial agreement with HGS on friendly terms.' Photograph: Martin Godwin for the Guardian
GlaxoSmithKline has gained full control of lupus drug Benlysta after snapping up Human Genome Sciences in a negotiated $3bn deal, following three months of hostile pursuit of its long-term US partner.
Europe's largest pharmaceutical manufacturer agreed to pay $14.25 (£9.13) a share in cash for the US biotech, which until recently had steadfastly resisted its advances. The boards of both companies have approved the deal.
GSK had initially offered to pay $13 a share, valuing HGS at $2.6bn. It went directly to the US firm's shareholders with a tender offer in May, after HGS adopted a poison pill to thwart the bid. The US biotech also approached other large drug-makers about a takeover.
The price is double the $7.17 the Human Genome share price traded at before GSK's bid was made public in April.
In a near 20-year partnership, GSK and HGS developed and sold Benlysta, the first lupus drug in half a century. An estimated 1.6 million people in the world have lupus.
The two companies also co-operate in the development of two other medicines for diabetes and heart disease. The Maryland-based biotech uses the human gene map to develop protein and antibody drugs.
GSK's chief executive, Sir Andrew Witty, said: "We are pleased to have reached a mutually beneficial agreement with HGS on friendly terms and believe the combination of GSK and HGS represents clear financial and strategic logic for both companies and our respective shareholders."
His counterpart Thomas Watkins said: "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 maximise value for our stockholders."
Despite bumping its offer 10% and paying a 99% premium to the share price before its interest was made public, industry analysts said GSK had got a good deal – to the frustration of Human Genome investors hoping for a price in the high-teens a share.
"I'm disappointed with the deal because I think Benlysta is actually going to be a good drug," said Carol Werther, an analyst at Summer Street Research. "Glaxo wanted to get this on the cheap and they were able to do it in the absence of other bidders."
GSK said it expected to achieve cost savings of at least $200 m by 2015.
Navid Malik, an industry analyst at Cenkos Securities, said the deal was "nice to have" rather than a need to have for GSK, whose $112bn market value dwarves that of Human Genome.
Shares in GSK were up 0.66% at £14.55 at the close of trading in London.
The drug industry has seen a flurry of deals recently, driven by big pharmaceutical companies' hunt for new medicines as many of their blockbuster drugs lose patent protection. In a two-stage deal, AstraZeneca teamed up with its US partner Bristol-Myers Squibb last month to buy diabetes drug developer Amylin for $7bn
US biotech Human Genome Sciences accepts $14.25 a share after resisting advances of Europe's largest drug firm for months
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