Piper Jaffray Believes Timing is Right for GSK to Buy Human Genome Sciences
Piper Jaffray has published a research report on Human Genome Sciences (NASDAQ: HGSI) after speculation of an acquisition by GlaxoSmithKline (NYSE: GSK) is resulting in HGSI's shares trading up today.
In the report, Piper Jaffray writes, "While takeout rumors are nothing new and the timing appears to be relatively early (only 7 months into Benlysta launch), we believe that GSK could be opportunistic given the weakness in HGSI stock, which is trading at its lowest levels since 2009. In addition to Benlysta, the HGS and GSK collaboration includes Syncria for diabetes and darapladib for cardiovascular disease, two Phase III assets not being valued in HGSI shares, in our opinion, and would provide extra incentive for GSK to acquire the biotech company. We estimate a takeout value of $21-26 per share based on an acquisition multiple of 4-5x."
Piper Jaffray maintains its Overweight rating and $18 price target on Human Genome Sciences, which is currently up $1.37 from its $11.25 closing price yesterday.
