Deal values company at over five and half times its last closing price.
GlaxoSmithKline is offering to acquire Genelabs Technologies for approximately $57 million in cash. GSK will gain a preclinical HCV program, a Phase III lupus treatment, and full rights to the hepatitis E vaccine that it previously licensed.
GSK says that it will pay $1.30 per share. The price is over five and half times Genelabs’ yesterday’s closing value of $0.23. The firm has been consistently trading below $1 since March. The company also reported a $3.2 million loss in the second quarter, up from $400,000 during the same period last year.
“Genelabs has demonstrated a strong track record in HCV drug discovery and identified numerous novel classes of inhibitors that target unprecedented mechanisms in the virus’s life cycle,” according to Zhi Hong, svp of the infectious diseases Centre for Excellence in Drug Discovery (ID CEDD) at GSK.
Genelabs will become part of GSK’s drug discovery organization. Its HCV candidates will be consolidated into ongoing internal programs and through external collaborations.
The tender offer is expected to close in December.