GlaxoSmithKline Plc (GSK) is nearing a deal to buy Human Genome Sciences Inc. (HGSI:US) at about $14 a share, a person with knowledge of the process said.
While the timing hasn’t been established, an announcement may come as soon as today, the person said. Glaxo’s earlier $13- a-share offer for Human Genome, which valued the Rockville, Maryland-based biotechnology company at $2.6 billion, is set to expire at 5 p.m. New York time July 20. The stock rose 3.1 percent to $14 in trading before the opening of U.S. markets.
A bid in the range of $14 would be “a decent price for GSK,” Erik Gordon, a professor of law and business at the University of Michigan in Ann Arbor, wrote in an e-mail.
Human Genome shares have traded above the offer price since Glaxo took its proposed takeover hostile on May 9, signaling that investors expected an increased bid. Glaxo went directly to shareholders after the U.S. company rebuffed its approaches. Human Genome had set a deadline of today for competing bids.
A takeover would give London-based Glaxo full control over marketing Benlysta, a treatment for lupus. The companies share revenue and profits from the drug equally.
Glaxo and Human Genome are also collaborating on two experimental medicines that are in late-stage testing: albiglutide for diabetes and darapladib for hardening of the arteries. Human Genome has the right to receive royalties of 10 percent on sales of darapladib and 5 percent on sales of albiglutide.
Reuters reported details of the process earlier today. Sarah Spencer, a spokeswoman for Glaxo in London, declined to comment on the report. Calls to Human Genome’s press office weren’t immediately returned.
Human Genome said on May 17 it was in talks with “major” pharmaceutical and biotechnology companies about a potential transaction and adopted a so-called “poison pill” shareholder rights plan to deter the hostile takeover.
Glaxo shares rose 0.2 percent to 1,448.50 pence at 1:47 p.m. in London today. Human Genome was valued at about $2.7 billion at the end of New York trading on July 13.
Bankers from Goldman, Sachs & Co. and Credit Suisse Group AG are advising Human Genome, while Glaxo has hired Lazard Ltd. (LAZ:US) and Morgan Stanley.
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