Human Genome Sciences Inc. entered into confidentiality agreements with “certain parties” and is providing an opportunity to engage in due diligence reviews, the Rockville-based company said Thursday.
Its board of directors unanimously said shareholders should reject an “inadequate” $2.6 billion bid from British pharmaceutical giant GlaxoSmithKline plc.
Glaxo said on May 9 it would commence with the bid for Human Genome, its partner on the Benlysta drug for lupus, by offering $13 a share in cash directly to stockholders. The offer was 81 percent more than the stock’s closing price on April 18, the day before Glaxo’s interest became public.
Human Genome said Thursday that it had adopted a so-called “poison pill” shareholder rights plan that will last one year to enable the company to complete its strategic review.
“This is all the usual and expected posturing,” Eric Schmidt, an analyst at Cowen & Co., wrote in an email Thursday. “I believe GSK remains committed to buying HGSI and do not expect others to have much interest.”
Human Genome appears interested in selling, Schmidt said. He said a deal may get done for about $15 a share.
Human Genome fell 2 cents to $14.23 at the close in New York. The shares had dropped 76 percent from their 2011 peak before the Glaxo offer became public last month. Glaxo declined 0.9 percent to 1,409 pence in London.
“The rights plan will not prevent any offers or transactions that the board determines to be in the best interest of HGS and its stockholders,” the company said today in a separate statement.
“The board believes that GSK acted to take advantage of the company’s depressed stock price levels,” Human Genome said.
Glaxo will proceed with its offer, which reflects the value of Benlysta, Human Genome’s other assets and cost savings of at least $200 million and the bid will close on June 7, the U.K. drugmaker said Thursday.
“GSK believes its offer represents full and fair value and is in the best interests of both companies’ shareholders,” the company said.