Human Genome Sciences, Inc.
) recently announced July 16, 2012 as the date for the submission
of definitive acquisition proposals. Human Genome sent a letter to
) asking the company to participate, clearly mentioning that the
board of directors of Human Genome has earlier rejected Glaxo's
$13.00 per share offer as inadequate.
Human Genome also mentioned that the final bid terms of Glaxo
along with the draft agreement will be provided to all the
interested bidders. The company further added that the timing of
the process may change and the process may not result in any
Earlier, in April 2012, Glaxo had made an offer to acquire Human
Genome for $13 per share in cash. Glaxo then commenced a tender
offer on May 10, 2012, which was initially set to expire on June 7,
2012. Glaxo had subsequently extended the tender period to June 29,
Meanwhile, Human Genome's board of directors continued to advise
its stockholders against Glaxo's tender offer.
If Glaxo succeeds in acquiring Human Genome, it would gain full
control over Benlysta (approved for treating systemic lupus
erythematosus). Glaxo will also gain control over late-stage
candidates such as darapladib (cardiovascular disease) and
albiglutide (type II diabetes).
Benlysta has significant potential, being the first lupus drug
to hit the market in more than 50 years. It was approved in the US
in March 2011, while EU approval came in July 2011. However, the
product has performed below expectations since launch. Human Genome
recorded sales of $31.2 million in the first quarter of 2012.
We believe the Glaxo takeover of Human Genome would be
beneficial. Glaxo has been a long-time partner of the company.
Apart from Benlysta, the companies are co-developing several
pipeline products like darapladib (phase III), albiglutide (phase
III) and rilapladib (phase II).
We currently have a Neutral recommendation on Human Genome,
which carries a Zacks #3 Rank (Hold rating) in the short run.
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