Skip to main content

The company logo of GlaxoSmithKline.

ALASTAIR GRANT/AP

GlaxoSmithKline is to acquire its long-time partner Human Genome Sciences for $3-billion, ending a three-month hostile pursuit of the U.S. biotech company on friendly terms after sweetening its offer.

The purchase price excludes Human Genome's cash and debt.

The deal comes after weekend talks in which Britain's biggest drug maker agreed to raise its bid to $14.25 a share from $13 previously, which Human Genome had rejected as inadequate.

Story continues below advertisement

Reuters earlier reported that the two sides were near a deal. The acquisition will secure GSK full rights to a recently launched drug for lupus and other new medicines.

Biotechnology companies are in increasing demand as Big Pharma companies seek new products to replace older medicines that are going off patent in the biggest wave of drug patent expiries in history.

In addition to gaining 100 per cent of Benlysta for lupus, a disease of the immune system, GSK also gets full ownership of experimental medicines for diabetes and heart disease.

GSK said it expected to achieve cost savings of at least $200-million by 2015 and the deal would boost its core earnings in 2013. It continues to expect to repurchase up to £2.5-billion in shares in 2012.

The deal is a nice to have rather than a need to have for GSK, whose $112-billion market value dwarfs that of Human Genome.

There have been a spate of acquisitions of biotech companies this year as large pharmaceutical companies seek to rebuild their pipelines.

Most recently, Bristol-Myers Squibb agreed to buy diabetes specialist Amylin Pharmaceuticals by sharing the $7-billion cost of the deal with AstraZeneca.

Story continues below advertisement

Human Genome, which rejected GSK's $2.6-billion offer in April as too low and launched an auction process, had come under pressure from investors to try and strike a deal with the British drug maker in the absence of any alternative bids.

The U.S. company set itself a July 16 deadline for finding higher bids but interest has been limited because GSK, its long-time partner, already has marketing rights to its drugs.

Last year, Human Genome and GSK won approval for Benlysta, the first new treatment for lupus in 50 years. But the drug's launch disappointed investors and Human Genome's shares fell from a high above $25 to a low of $6.51 in December.

GSK made its offer a few months later, prompting Human Genome to launch an auction with the help of Credit Suisse and Goldman Sachs.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies