Human Genome Sciences Raising Cash (HGSI)

By Douglas A. McIntyre Updated Mar 26, 12:57AM EDT · Published Nov 30, 4:13PM EST

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Human Genome Sciences, Inc. (NASDAQ: HGSI) is rasing cash. The company announced that it is selling up to 12.5 million shares of common stock. The company earmarked funds for general corporate purposes, which includes acquisition of additional manufacturing capacity and development of new indications for BENLYSTA, potential sales and marketing activities, clinical trial, research and development, general and administrative and manufacturing expenses. It also said it may use funds to potentially retire debt and said a portion of the proceeds could be for strategic investments.

What is interesting is that the company effectively is trying to say it has no acquisition targets today: “While we evaluate company, product, technology and similar opportunities from time to time, we currently have no material agreements or commitments with respect to any such acquisition or investment.”

But there is more to consider here than companies it wants to acquire. Many investors have hoped that Human Genome’s lupus franchise would get it acquired. If the company is raising cash again, that will potentially take away any extra takeover premium.

Shares are being sold under an existing shelf registration statement. Goldman Sachs and Citigroup are joint book-running managers for the offering, and the underwriters will have a 30-day option to purchase up to an additional 1,875,000 shares of common stock.

It looks like our thought that this eliminates Human Genome as a buyout candidate is a shared one. Shares closed up 2.6% at $27.82, yet shares are trading down close to $26.50 in the after-hours session.

This is likely to put the remaining hopes and rumors for a takeover any time soon to bed.

JON C. OGG

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.