Corixa shareholders step up opposition to GSK offer

One of the largest shareholders in Corixa, a US group that GlaxoSmithKline is proposing to buy for $300m (£164m), has described the UK pharmaceutical group's offer as "egregiously low" .

One of the largest shareholders in Corixa, a US group that GlaxoSmithKline is proposing to buy for $300m (£164m), has described the UK pharmaceutical group's offer as "egregiously low" .

Joseph Pappo, the senior portfolio manager at Chicago-based Lotsoff Capital Management, which owns an 8 per cent stake in Corixa, said he plans to vote against the offer at the company's shareholder meeting in Seattle on 12 July.

MPM BioEquities Adviser, which owns almost 2 per cent of Corixa, will also block the deal and has asked for a meeting with the company's management to discuss the offer. Kurt von Emster, a portfolio manager at MPM, said a fair value for Corixa would be about $6.50 a share, not the $4.40 GSK is offering.

Last month, Miriam Sarnoff, a Corixa investor, launched a lawsuit in a Delaware court alleging the company's directors agreed a too-low offer "without having engaged in fair and open negotiations with all potential bidders".

GSK made a $300m offer to buy Corixa in April. It said yesterday its offer for the business was "fair". Corixa's management said it was "happy with the terms of the deal".

GSK owns 20 per cent of the Seattle-based company and licenses one of its products, a compound called MPL. This is used to increase the potency of several GSK vaccines, including Cervarix, a vaccine for cervical cancer.

Cervarix, which could be on sale in Europe by the end of next year, protects against a virus linked to most cases of cervical cancer. Industry analysts have estimated Cervarix double GSK's sales of vaccines within five years of its global launch. Last year GSK made £1.2bn from this part of the business.

A recent study published in The Lancet medical journal said Cervarix was likely to be the first 100 per cent effective vaccine against the human papilloma virus.