GlaxoSmithkline is likely to announce in Monday a deal for buying Human Genome Sciences for around $2.8 billion, thereby ending a 3 month hostile pursuit of the biotech firm from US on friendly terms after sweetening the offer.
According to the sources with information of the issue, Britain’s largest drug maker is set to pay almost $14 per share , up from the previous amount of $13 a share which had been refused by Human Genome – which was one of the early pioneers in the gene based drug discovery- stating it as inadequate.
As a wave of biggest drug patent expiries grips us, Biotech firms are in increasing demand as Big Pharma companies are seeking to replace the older medicines which are getting off patents.
The acquisition shall enable GSK complete control over Benlysta, a recently launched drug for Lupus, a disease affecting the immune system along with other medicines under experimentation for heart diseases and diabetes.
A deal is likely to be announced just before the stock markets open for trading on Monday. At the time of reporting, details are still being worked out and the agreement still needs to be finalized.
The deal seems like a great conclusion for Glaxo. At $14 per share, the amount is slightly higher than what they had offered earlier but much lower than what the market experts were expecting based upon the recent developments.
The deal is more of a nice to have rather than a must have option for Glaxo, which has a $112 billion market value dwarving that of Human Genome. It will enjoy 100 % of the upside if the drugs from Human Genome live upto their promise.