June 14 (Bloomberg) -- Genmab A/S rose the most in almost a decade in Copenhagen trading after an analyst said the biotechnology company is undervalued, making it a takeover target for GlaxoSmithKline Plc.
“The stock value is so low it makes sense for GSK to make an offer for the entire company,” Peter Aabo, founder of BiotekAnalyse, said today by phone. AktieUgebrevet ApS published Aabo’s analysis of Copenhagen-based Genmab today in its weekly investor newsletter.
Genmab’s cash and short-term investments equal almost half its market value of about 2.6 billion kroner ($431.2 million), indicating the market is undervaluing the company, Aabo said. Data for its experimental cancer treatment zalutumumab are probably strong enough to lead to U.S. approval either next year or in 2012, he said. An acquirer probably would offer 150 kroner to 200 kroner a share, Aabo said. At the higher price, a bid would value Genmab at as much as 9 billion kroner.
Genmab gained 14.44 kroner, or 33 percent, to close at 58.15 kroner. The gain was the biggest ever for the company, which sold shares in an initial public offering in October 2000. Genmab has never posted an annual profit.
“This is just a story that has been around for very long time,” said Henrik Aagaard-Jensen, a sales trader at Jyske Bank A/S in Silkeborg, Denmark. “We don’t believe that Glaxo would make a bid as they have partnership agreements with Genmab in place.”
Claire Brough, a spokeswoman at Glaxo, which owns a stake of just below 10 percent in the company, declined to comment. Helle Husted, a spokeswoman for Genmab, declined to comment on whether it had been approached by Glaxo, citing the company’s communication policy.
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An acquirer probably would offer 150 kroner to 200 kroner a share, Aabo said. At the higher price, a bid would value Genmab at as much as 9 billion kroner.