GlaxoSmithKline (NYSE: GSK) extended its hostile takeover offer for Human Genome Sciences Inc. (Nasdaq: HGSI) after failing to win control of the U.S. biotechnology company with its $2.6 billion bid.

Shareholders will have until 5 p.m. New York time on June 29 to tender their stock, London-based Glaxo said in a statement Friday. Glaxo said 474,029 Human Genome shares were tendered before the $13-a-share offer expired at midnight New York time Thursday. Human Genome, based in Rockville, Maryland, has 199.1 million shares outstanding.

Human Genome shares have traded above the offer price since Glaxo announced the proposed takeover on May 9, signaling investors expect a higher bid. Glaxo, which operates its U.S. headquarters in Research Triangle Park, N.C., went directly to shareholders of Human Genome after the company rebuffed its approaches, saying the bid was inadequate.

The “miniscule” number of shares tendered shows “there isn’t any interest in this offer at this level,” said Navid Malik, an analyst at Cenkos Securities Plc in London. “Glaxo has to raise their offer. That’s the only way forward.”

Buying Human Genome would give Glaxo full control over marketing Benlysta, a treatment for lupus. The companies share revenue and profits from the drug equally.

Glaxo and Human Genome are also collaborating on two experimental medicines that are in late-stage testing: albiglutide for diabetes and darapladib for hardening of the arteries. Human Genome has the right to receive royalties of 10 percent on sales of darapladib and 5 percent on sales of albiglutide.

Human Genome said on May 17 it’s in talks with “major” pharmaceutical and biotechnology companies about a potential transaction.

“This process continues to be active and fully under way,” Human Genome said in a statement Friday. “We are committed to completing our exploration of strategic alternatives as expeditiously as possible.”

The company has adopted a so-called “poison pill” shareholder rights plan to deter the hostile takeover.

Higher Price

Human Genome fell 0.9 percent to close at $13.23 in New York trading.

Human Genome rejected the bid last month partly out of concern for stockholders who bought shares at an average price that’s higher than the offer, two people with knowledge of the matter said at the time. All but three of the 25 largest shareholders acquired stock at a higher average price, said the people, who asked not to be named because the talks are private.

Glaxo’s offer was 81 percent more than the stock’s closing price on April 18, the day before Glaxo’s interest became public.
Human Genome said on May 17 it’s in talks with “major” pharmaceutical and biotechnology companies about a potential transaction and adopted a so-called “poison pill” shareholder rights plan to deter the hostile takeover.

Such defenses are engineered to make unwanted takeover bids prohibitively expensive by allowing existing shareholders to buy new shares at a discount when the bid is made. That drives up the cost of the acquisition.

Bankers from Goldman, Sachs & Co. and Credit Suisse Group AG are advising Human Genome, while Glaxo has hired Lazard Ltd. and Morgan Stanley.