GSK clinches deal to buy Human Genome for $3 billion LONDON (Reuters) - GlaxoSmithKline is to acquire its long-time partner Human Genome Sciences for about $3 billion, ending a three-month hostile pursuit of the U.S. biotech company on friendly terms after sweetening its offer. The purchase price excludes Human Genome's cash and debt. The deal comes after weekend talks in which Britain's biggest drugmaker agreed to raise its cash bid to $14.25 a share from $13 previously, which Human Genome had rejected as inadequate. Reuters earlier reported that the two sides were near a deal. The acquisition will secure GSK full rights to a recently launched drug for lupus and other new medicines. Biotechnology companies are in increasing demand as Big Pharma companies seek new products to replace older medicines that are going off patent in the biggest wave of drug patent expiries in history. In addition to gaining 100 percent of Benlysta to treat lupus, a disease of the immune system, GSK also gets full ownership of experimental medicines for diabetes and heart disease that are in late-stage development. Despite bumping its offer 10 percent and paying a 99 percent premium to the share price before its interest was made public, industry analysts said GSK had got a good deal - to the frustration of Human Genome investors hoping for a price in the high-teens per share. "I'm disappointed with the deal because I think Benlysta is actually going to be a good drug," said Carol Werther, an analyst at Summer Street Research. Glaxo wanted to get this on the cheap and they were able to do it in the absence of other bidders. The boards of both companies have now approved the transaction, the two companies said on Monday. Their statement did not specify what future Human Genome Chief Executive Thomas Watkins had within GSK. GSK said it expected to achieve cost savings of at least $200 million by 2015 and the deal would boost its core earnings in 2013. It continues to expect to repurchase up to 2.5 billion pounds ($3.9 billion) in shares in 2012. Navid Malik, an industry analyst at Cenkos Securities, said the deal was "nice to have" rather than a need to have for GSK, whose $112 billion market value dwarves that of Human Genome. Shares in GSK were flat by 1415 GMT in a slightly weaker market for European stocks, while Human Genome gained 4.6 percent to $14.21. There has been a spate of acquisitions of biotech companies this year as large pharmaceutical companies seek to rebuild their pipelines. Human Genome, which rejected GSK's $2.6 billion offer in April as too low and launched an auction process, had come under pressure from investors to try to strike a deal with the British drugmaker in the absence of any alternative bids. The U.S. company set itself a July 16 deadline for finding higher bids but interest has been limited because GSK, its long-time partner, already has marketing rights to its drugs. Biotech company Celgene was at one stage considering whether to bid and was conducting due diligence, according to a source familiar with the matter, but negative analyst and investor reaction when news of those discussions broke deterred the U.S. group. GSK made its offer a few months later, prompting Human Genome to launch an auction with the help of Credit Suisse and Goldman Sachs. GSK was advised by Lazard and Morgan Stanley. Additional reporting by Soyoung Kim in New York and Toni Clarke in Boston; Editing by Jon Loades-Carter