Europe's largest drugs firm has lodged a $13 a share, or $6.2 billion, cash offer and said it won't budge on the deal now on the table. It also said it won't participate in Human Genome Sciences' "strategic alternatives" review process.
The current Human Genome Sciences share price of around $14.62 suggests American investors were expecting a higher offer. In London, the mood was a little more realistic. "We noted last month that we believed some sort of deal was likely and, in light of the broader challenges across the industry, we continue to believe it will be difficult for shareholders to ignore the certainty of a cash offer," said Dr Mike Mitchell, analyst at broker Seymour Pierce.
Going hostile with a bid runs slightly against the grain for a big pharma company such as Glaxo. The titans of the drugs world tend to favour collaborative, joint-venture style deals, or agreed mega-mergers where cost savings are the rationale behind the transaction.
So to see boss Andrew Witty taking a more combative stance has raised a few eyebrows. The company said the following:
Glaxo continues to believe it has made a full and fair offer which is in the interest of shareholders of both companies. The transaction is well aligned to Glaxo's long-term strategy of delivering sustainable growth, simplifying Glaxo's business model, enhancing R&D returns and deploying capital with discipline. For Human Genome Sciences shareholders, it provides immediate liquidity at a substantial premium while eliminating further exposure to the significant execution risk inherent in Human Genome Sciences achieving its future growth objectives.
If it is successful, Glaxo will take full ownership of Benlysta, a breakthrough drug for the auto-immune disease Lupus. Human Genome Sciences discovered the drug, but it is sold by Glaxo.
Followers of ImmuPharma will be closely monitoring events as the UK-listed drug firm is developing Lupuzor, a competitor to Benlysta, which is ready to enter the final stages of clinical trials. It is currently holding a beauty parade to find a strategic partner that would fund these studies.