HGS shares surge on Glaxo buyout reports

Shares of Human Genome Sciences hit $19.20--a seven-year high--after reports surfaced yesterday that the market has been buzzing about an upcoming buyout offer from GlaxoSmithKline. The Telegraph lit the market fire with an item about Glaxo's rumored $30-a-share bid for HGS.   

HGS isn't talking, which will do nothing to tamp down the rumors. Analysts, however, always have something to say. And the common wisdom of the day is that Glaxo is highly likely to plunk down a big premium to snap up HGS now that their partnered lupus drug has suddenly emerged as a big, bright, blockbuster prospect. Better to buy now, some are saying, rather than wait for another late-stage study to prove that Benlysta works as expected.

"Benlysta could be a very big drug, a multibillion-dollar drug," says ThinkEquity's Jason Kolbert. "Lupus is an unmet need and it's a benign drug, so you don't have a risk/reward problem."

"It makes a lot of sense," Liisa Bayko, a JMP Securities analyst, tells the Washington Post. "If the lupus drug ends up being positive, it's a shoo-in for GSK to buy them out considering they have access to a lot of Human Genome's portfolio."

- read the Reuters story
- check out the Washington Post piece

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