UK-based pharmaceutical major GlaxoSmithKline's (GSK) $2.6bn bid to acquire US biotechnology firm Human Genome Sciences (HGS) has failed.
The two companies have collaborated for the creation of new medicines for 20 years, but GSK's offer of $13 per share was rejected after HGS said it did not "reflect the value inherent in HGS".
GSK's offer was almost double the closing share price of $7.16 the day before the bid, however almost a year ago HGS was valued at approximately $30 per share and share prices have consequently doubled after the news of GSK's bid was made public.
The companies collaborated for the development of Lupus drug benlysta, for which profits are currently shared, and are also currently working on darapladib, a drug that could prevent heart attacks.
The understanding between the two companies could however become strained, as GSK chief executive Sir Andrew Witty has said he is disappointed regarding HGS's decision to go public with the offer without further discussions.
In a private letter to HGS chief executive Thomas Watkins, Witty said, "We believe now is the appropriate time in the evolution of our relationship for our two companies to combine and that GSK is uniquely positioned to deliver on the promises of benlysta, albiglutide and darapladib for the physicians, patients and the respective shareholders that we serve."
HGS responded with a public statement confirming the rejection of the offer, before confirming that the company will now explore "strategic alternatives".