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Sometimes the patience pays off.

For months now, if not years, discussions of a possible GlaxoSmithKline (GSK) buyout of Human Genome Sciences (HGSI) have been discussed among the speculative - and sometimes not so speculative - circles, given that the two companies were essentially married already through a partnership deal for Benlysta, Human Genome's lupus-treating drug that became the first such treatment approved by the FDA in over fifty years.

The false alarms have come and gone, with each one providing investors the opportunity to trade the speculative price runs, but as nothing concrete ever materialized, many were left to consider HGSI's potential outside of the prospects of a buyout.

The recent price dip back to the seven dollar mark set up investors with a decent buying opportunity again, as it was argued on a few occasions, but on Thursday the buyout speculation became speculation no more as a de facto offer from Glaxo became public and shares of Human Genome doubled on a dime.

Glaxo's offer for a $13 per share buyout of HGSI - which equated to roughly $2.6 billion - was outright rejected by Human Genome, who in turn has hired Goldman Sachs and Credit Suisse to help explore strategic alternatives, according to news reports that circulated on Thursday.

Human Genome joins a couple of other high profile companies to reject buyout offers over recent months.

Illumina Inc. (ILMN) rejected two offers from Roche Holding AG (RHHBY), one for $44.50/share and the other for $51/share, and Amylin Pharmaceuticals (ALMN) turned away Bristol-Myers Squibb Company (BMY) on a $3.5 billion, $22/share offer.

Sentiment on the street has it that Human Genome will ultimately end up being bought out by Glaxo, but it doesn't look like the current prices are going to cut it.

Regardless, the news alone provided a quick double in price for investors who took advantage of the numerous peaks and valleys for HGSI over the recent months, and like AMLN and ILMN before it, HGSI is now a no-kidding buyout story to watch.

Sometimes the patience pays off.

Disclosure: No position.

Contact VFC's Stock House: vfc@vfcsstockhouse.com

Originally published at: http://vfcsstockhouse.com

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