Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Human Genome Goes Full Monty

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Well played, Human Genome Sciences (Nasdaq: HGSI  ) . I just hope the move doesn't come back to haunt you.

The biotech is in a battle -- it hasn't reached war status yet -- with its partner GlaxoSmithKline (NYSE: GSK  ) , which wants to buy the company for $13 per share. Human Genome politely declined and said it was going to look for other suitors. The openness stands in stark contrast to Amylin Pharmaceuticals (Nasdaq: AMLN  ) , which has been publicly coy about its plans.

In keeping with the full-disclosure policy it seems to have adopted, Human Genome announced today that its bidding process will close on July 16.

The biotech invited Glaxo to join the bidding process, but the pharma giant has already said that it doesn't want to play that game. That seems like a prudent move for Glaxo, given that it could just be bidding against itself.

Announcing a date is good for investors. Knowledge is power, and an assurance that this won't drag on for too much longer should help keep investors interested. Shares continue to trade above the $13 offer that Glaxo made.

But disclosing the end of the bidding period puts Human Genome in a precarious position if no bidders arrive. It’s hard to manage expectations and let investors down easy over time when they all know the deadline.

Obviously, the strategy Human Genome has adopted isn't all that risky if it knows it has at least one bidder willing to top Glaxo's $13 offer. Unfortunately, investors won't know whether the biotech is bluffing until it's too late unless Human Genome takes a page from Amylin's playbook and use undisclosed sources to disclose big names like Pfizer (NYSE: PFE  ) and Merck (NYSE: MRK  ) that are reportedly interested in the company. That might be the only way to get Glaxo to the bidding table.

Betting on M&A poker hands without the ability to see the cards is a dangerous game. Not much like clinical trials and FDA approval decisions, Human Genome's purchase, or not, has become a binary event with the potential to fall back toward $8 per share if Galxo, the only current bidder, walks away.

The biggest binary event, the presidential election, is around the corner. Check out the Fool's new free report, "These Stocks Could Skyrocket After the 2012 Presidential Election," where you'll get ideas for companies that can benefit from each candidate's platform Get your free copy.

Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Pfizer. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1914694, ~/Articles/ArticleHandler.aspx, 10/23/2016 11:57:45 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
HGSI.DL $0.00 Down +0.00 +0.00%
Human Genome Scien… CAPS Rating: **
AMLN.DL $0.00 Down +0.00 +0.00%
Amylin Pharmaceuti… CAPS Rating: **
GSK $41.13 Down -0.30 -0.72%
GlaxoSmithKline CAPS Rating: ***
MRK $61.20 Down -0.72 -1.16%
Merck and Co. CAPS Rating: ****
PFE $32.18 Down -0.36 -1.11%
Pfizer CAPS Rating: ****