Oh, the irony.
Human Genome Sciences
So whose press release does Human Genome point to in its quest to prove that it's more valuable than Glaxo's lowball offer? None other than Glaxo's.
The two are partners on more than just the lupus drug Benlysta. Glaxo is also developing a couple of Human Genome-discovered drugs currently in late-stage trials: diabetes drug albiglutide and darapladib, for hardening of the arteries.
So when Glaxo presented data on albiglutide at the American Diabetes Association meeting, Human Genome felt compelled to issue an FYI press release pointing out the data. The title of the press release literally began, "FYI from Human Genome Sciences."
Albiglutide is a GLP-1 agonist in the same class as Amylin Pharmaceuticals'
Human Genome is entitled to another $150 million in milestone payments and single-digit royalties on worldwide sales of the drug. Unfortunately, the potential for milestones and royalties isn't all that attractive to would-be suitors because there's nowhere for acquirers to add value, as Glaxo is in full control of the molecule.
Increasingly good data for albiglutide from the other trials would make Human Genome more valuable to Glaxo, but as long as it's the only bidder, there's no reason for Glaxo to increase its offer by more than a token amount.
While Human Genome tries to drive a hard bargain, there's a worry that it could drive away its suitor, which would be bad news if another bidder doesn't step up. After Roche walked away from its offer to buy Illumina, shares in the genomic chip and sequencing specialist have slipped down near the pre-offer price.
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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Illumina. The Motley Fool has a disclosure policy.
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