As its battle for control of Human Genome Sciences looks to be coming to an end, GlaxoSmithKline has lined up 12 directors to replace the entire board at the US biotech, according to Reuters.
The news agency, citing an unnamed source familiar with the situation, says that GSK has started reaching out to leading figures in the pharmaceutical and biotech world as well as finance and governance experts. The source says that 12 people have agreed to be its nominees and the paperwork is in place to initiate consent solicitation to the shareholders of HGS.
July is likely to be a key month in deciding the fate of GSK's hostile $2.60 billion bid. HGS has set a deadline of July 16 for offers to acquire the company in connection with its ongoing strategic alternatives review, a process that GSK has refused to get involved with, while the UK drugs giant has extended its tender offer until July 20, without raising its $13 per share bid.
Meantime, as the dust settles on the confirmation that GSK is paying $3 billion for the unlawful promotion of the antidepressants Paxil (paroxetine) and Wellbutrin (bupropion) and for failing to report safety data about its diabetes drug Avandia (rosiglitazone), Ana Nicholls, healthcare analyst at the Economist Intelligence Unit, has been looking at the financial effects.
She notes that it "represents a sizeable slap on the wrist", saying that while GSK has a strong cash position, with free cash flow of $6.40 billion in 2011, the pile has deteriorated over the past couple of years. Moreover, with the company keen to make acquisitions, HGS being one, "this settlement will constrain its ambitions slightly".