GlaxoSmithKline is to take its unsolicited $2.6 billion takeover bid for Human Genome Sciences direct to shareholders in the U.S. biotech group by launching a tender offer at $13 a share this week.
As you may recall, HGSI rejected the approach from Britain's biggest drugmaker last month, saying it did not reflect the company's inherent value, but GSK insists its bid is "full and fair".
The U.S. pioneer of gene-based drug discovery sells with GSK a new drug for lupus, called Benlysta, and the companies are also collaborating on two other drugs for diabetes and heart disease that could become significant sellers. Buying Human Genome would give GSK full rights to these partnered drugs. A spokeswoman for GSK declined to say exactly when this week the tender would be launched.
The tender will remain open for 20 business days after its commencement. Human Genome has hired Goldman Sachs and Credit Suisse to explore strategic alternatives, including a possible sale of the company, and has invited GSK to join the process.
GlaxoSmithKline, which has profit-sharing agreements with HGS on three drugs, said Wednesday that its offer was 81 percent more than the HGS share price on April 18, before HGS disclosed the earlier private offer.
The tender offer, which is a direct approach to the target's shareholders, will remain open for 20 days.
Glaxo said it remains "willing to meet and review its offer with HGS at any time," but said it believes Human Genome has had ample time to complete its review of alternatives. Glaxo also said its participation in the review process is unnecessary as it isn't "conditioned on due diligence or financing and can be completed expeditiously."
Human Genome Sciences has developed core competencies in the discovery and understanding of human genes and their biological functions, and in the discovery and development of novel therapeutic agents. Its albumin-fusion technology allows the company to create long-acting forms of protein drugs by fusing the gene that expresses human albumin to the gene that expresses a therapeutically active protein. The company has developed compounds in clinical development which includes drugs to treat hepatitis C, lupus, anthrax disease, cancer, rheumatoid arthritis and HIV/AIDS.
Human Genome Sciences' products include: BENLYSTA®, an investigational human monoclonal antibody drug that specifically inhibits the biological activity of B-lymphocyte stimulator; Raxibacumab, a human monoclonal antibody drug that is developed for the treatment of inhalation anthrax; Mapatumumab (HGS-ETR1), a human monoclonal antibody that induces cancer-cell death in a highly targeted way by activating the protein known as TRAIL receptor 1; Syncria® (albiglutide), a biological product that designed to act throughout the body to help maintain normal blood-sugar levels and to control appetite; Darapladib for coronary heart disease and ischemic stroke; etc.
The BioMedReports FDA Calendar shows seven upcoming milestones for HGSI, several of them related to late stage clinical trials. In March, GlaxoSmithKline plc announced that topline results had been received from seven of the eight ‘Harmony’ Phase III studies investigating the use of Albiglutide in type II diabetes. Albiglutide is an investigational once weekly glucagon-like peptide-1 (GLP-1) agonist. Albiglutide Harmony 8 will complete in mid 2012 and the five ongoing studies will complete in early 2013. The Harmony programme was designed to permit assessment of safety and durability of glycemic control after long-term use. The studies will provide data on the effect of albiglutide over three years, the first GLP-1 agonist to do so.
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