Battle near an end as Glaxo set to snap up US target for £1.9bn

GlaxoSmithKline was today closing in on a deal to buy long-time target Human Genome Sciences for about $3 billion (£1.9 billion).

It has taken the drugs giant several months to land its prize, after a battle that began when the American firm rejected its initial offer of $2.6 billion in April. As HGS began scrabbling for rival offers to trump Glaxo, the UK company said it would make its deal hostile.

It now appears that HGS is willing to concede for a deal priced at $14.25 a share — better than the $13 originally tabled. At that price, the deal is double what $7.17 HGS shares were fetching before Glaxo’s bid was disclosed in April.

The deal is just the latest in a busy sector, as large drug companies fight for new sources of revenue as traditional money-spinners come off patent protection. Last month, Bristol-Myers Squibb said it would pay $5.3 billion for diabetes drug maker Amylin Pharmaceuticals.

Glaxo began working with HGS almost 20 years ago, paying $125 million in 1993 to establish a research partnership. HGS was one of the first biotech companies to emerge from the early 1990s push to map all of the genes in the human body.

Glaxo and HGS jointly sell a drug for lupus that they developed together, and share financial interest in drugs for diabetes and heart disease.

Companies like HGS have been in demand by acquirers in recent years. Using the human gene map, the biotech company has tried to identify the function of various genes and their proteins and turn that knowledge into new drugs.