The often-bitter courtship between GlaxoSmithKline and Human Genome Sciences ends in union after all.

The often-bitter courtship between GlaxoSmithKline and Human Genome Sciences has ended in marriage after all, as both companies this morning announced that GSK will acquire HGS for about $3 billion, or $14.25 a share.

GSK said it expects to achieve at least $200 million in cost cuts by 2015, without offering details, but also anticipates the deal to add to its earnings starting in 2013—and not affect its ongoing share buyback program, under which the British pharma giant continues to expect to repurchase £2 billion ($3.1 billion) to £2.5 billion ($3.9 billion) in shares in 2012.

“We are pleased to have reached a mutually beneficial agreement with HGS on friendly terms and believe the combination of GSK and HGS represents clear financial and strategic logic for both companies and our respective shareholders,” GSK CEO Sir Andrew Witty said in a statement.

The $14.25 share price values HGS at $3.6 billion, and reflects a sweetened offer for HGS made recently by GSK, which surfaced this morning in numerous news reports that cited unnamed sources. According to the reports, GSK was said to be offering about $14 for the Maryland-based biotech, whose shares closed Friday at $13.58.

GSK raised its offer following release July 11 of Phase III data from the Harmony 8 clinical study showing that a once-weekly type 2 diabetes drug it is co-developing with HGS, the injectable glucagon-like peptide 1 albiglutide, compared favorably to Merck diabetes pill Januvia (sitagliptin), which generated $3.3 billion in sales last year, up 39% from 2010.

The agreed-on price also reflects a 99% premium to HGS’ closing price of $7.17 per share on April 18, the last day of trading before HGS publicly disclosed GSK’s initial private offer of about $2.6 billion.

That offer, based upon a $13 share price, drew an angry response from HGS, which said the company was being undervalued by GSK since that offer emerged after HGS shares reached their 52-week low. In addition, HGS has argued that the lupus drug Benlysta® (belimumab)—which is jointly marketed by the two companies—offers substantial potential for sales growth.

“We remain very confident in blockbuster potential of Benlysta,” HGS President and CEO H. Thomas Watkins told analysts on the April 24 conference call that followed release of Q1 results.

During the first quarter, Benlysta net sales totaled $31.2 million, up 21% from $25.7 million in the fourth quarter of 2011. HGS also trumpeted sales data showing that as of the end of March 2012, approximately 80% of community-based accounts that are the largest infusing practices began to purchase the drug, as did more than 80% of top 50 key hospital accounts.

Benlysta finished 2011 with net sales of $52.3 million, reflecting three full quarters on the market for the first approved drug for systemic lupus in 56 years, and the company finished the first quarter of this year with $31.2 million in net sales. Yet those numbers lagged behind initial analyst projections, accounting for a slump in share price since the drug won FDA approval early last year. In January, at the JP Morgan conference in San Francisco, Watkins announced plans to cut 150 jobs across departments, including R&D.

HGS and GSK are partners on two late-stage drugs—albiglutide and darapladib, designed to treat cardiovascular disease. The companies have worked together on some drug projects stretching back two decades.

“HGS has had a long and productive working relationship with GSK, and together we will be uniquely positioned to achieve the full potential of Benlysta and other products in our pipeline for the benefit of those battling serious disease around the world,” Watkins said.

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