Suggestions that UK drug giant GlaxoSmithKline is planning a takeover of development partner Human Genome Sciences for $30/share - or some $4 billion - pushed the latter's stock up $2.03 to $19.21 per share in afternoon trading on August 25, with a gain of 11.79%. Aftermarket trading is up +0.46 to 19.66, another gain of 2.40%. While observers see this as just a rumor, they believe it makes some sense as Human Genome and GSK have been partners since 1993. Human Genome Sciences worked together and received royalties from Glaxo in 2006 for the Diabetes medication Syncria. April 2008 saw HGSI reacquiring the rights for the HGS-ETR1 and HGS-ETR2 oncology programs from Glaxo.
So what is going on here? asks Seeking Alpha, saying: 'Has Glaxo seen results from their second set of pivotal Phase III trials and are ready to make a deal?' Results are set to be released in November for their Lupus drug Benlysta (belimumab).
Regardless, Seeking Alpha sees this as positive financial news for Human Genome Sciences, which once traded in March around 0.45, saying it likes the news coming in and the anticipation for results in November. Many analysts see this stock as undervalued and have a target range around 26/share.
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