Before GlaxoSmithKline ($GSK) struck a deal to buy Human Genome Sciences ($HGSI) for $3 billion this month, HGS turned down a far sweeter $7 billion bid from biotech giant Amgen back in 2010, sources told Reuters. And the report likely stings long-time HGS investors, who watched GSK succeed in a pact to buy their stock for a relative song at $14.25 per share compared to their value back in 2011.
Advised two years ago to reject Amgen's ($AMGN) interest in buying the biotech for $35 per share, HGS brass and their consultants were unable to entice Amgen back to the negotiating table earlier this year when searching for alternatives to GSK's initial $13-per-share offer. Amgen's disinterest in trumping GSK's offer shows just how far HGS had fallen over the past year after a lackluster launch of its lupus drug Benlysta, in which GSK has shared a stake along with several of the biotech's other key assets.
Credit team GSK for expert timing in its takeover of partner HGS, whose stock was languishing in the neighborhood of $7 per share when the London-based drug giant cruised in with its offer in April. Glaxo will now control 100% of the Benlysta business and full ownership of late-stage contenders darapladib for heart disease and albiglutide for Type II diabetes. The deal bolsters GSK's already solid late-stage pipeline and could pay dividends based on the success of those candidates from HGS.
The history involving Amgen sheds lots of light on what fueled HGS's board to aggressively seek better offers after GSK's bid arrived. Their hunt failed. Amgen, the world's largest biotech, certainly has the wherewithal to pull the trigger on a multibillion-dollar buyout right now. But the prevailing wisdom was that GSK held the right hand in buying HGS because of its tight grip on the biotech's key assets.
Without naming the interested party, Human Genome Sciences revealed last week in a regulatory filing that the company had received interest from a potential buyer at $35 per share back in August 2010. Credit goes to Reuters' veteran reporter Ben Hirschler and his colleagues for ferreting out the name of that interested buyer--and helping us understand why those who pushed Amgen away back then might be kicking themselves now.
- get more in Reuters' article