British pharma giant GlaxoSmithKline on Wednesday ratcheted up its efforts to acquire Human Genome Sciences, taking its $2.6 billion offer directly to stockholders of the Rockville biotech.
Last month, HGS publicly spurned a similar — and privately made — offer from its longtime partner. The bid, at $13 a share, was an 81 percent premium over HGS’s stock price the previous day. HGS stock doubled on the news to about $14..
At the time, HGS said it would begin a review of its strategic alternatives, including an acquisition by GlaxoSmithKline. Together, the companies last year began marketing Benlysta, the first federally approved drug for lupus in a half-century. They’re also collaborating on treatments for cardiovascular disease and type 2 diabetes, both of which are in phase 3 clinical trials.
In a statement titled, “Stop-Look-Listen,” HGS officials urged shareholders to sit tight and reject GlaxoSmithKline’s more hostile takeover attempt, for at least 10 days.
“The HGS Board of Directors, in consultation with independent financial and legal advisors, will carefully review and consider the offer,” the statement reads. “The Board intends to advise stockholders of its recommendation regarding the proposed tender offer within 10 business days of when GSK commences it. HGS stockholders are advised to take no action at this time pending the review of the offer by the Company’s Board of Directors.”
HGS pointed out that the new offer is the same as the old offer — which it said undervalued the company. HGS stock fell about 2 percent in early trading Wednesday, to $14.35.
Through spokesmen, HGS declined further comment.
For its part, GlaxoSmithKline said in a statement that it will not participate in HGS’s review process because “its offer is not conditioned on due diligence or financing and can be completed expeditiously.” Also, HGS has had enough time to review its alternatives, according to the statement.
GlaxoSmithKline also said it was now going directly to HGS shareholders, who “should have the opportunity to decide for themselves on the merits of the offer.”
For HGS shareholders, the offer “provides immediate liquidity at a substantial premium while eliminating further exposure to the significant execution risk inherent in HGS achieving its future growth objectives,” GlaxoSmithKline said.