Human Genome adopted the stockholder rights plan earlier this month in an attempt to ward off GlaxoSmithKline in what is becoming an increasingly acrimonious battle between the companies that together sell new Lupus drug Benlysta.

The British company had intended to take its $13-a-share offer direct to investors after Human Genome's board said it was inadequate.

However, on May 23, GlaxoSmithKline (GSK) said it would not proceed with its offer unless the U.S. biotechnology company dropped a "poison pill" shareholder rights plan imposed to block the deal.

The term "poison pill" usually refers to a company's move to ward off any unwanted or hostile takeover attempts.

Human Genome shareholder and plaintiff Duane Howell filed the lawsuit on May 25, asking the court to restrain the board from invoking the defensive tactic, court documents showed.

Howell's lawyers argued in the court papers that the poison pill holds the "company's shareholders hostage to the board and prohibit GSK and other potential acquirers from taking offers to purchase the company."

The plaintiff lawyers said that unless the board was prevented from using the poison pill, Human Genome shareholders would lose the chance to secure the "premium price offered by GSK."

The case is Duane Howell, individually and all others similarly situated vs H. Thomas Watkins, et al, Case No. 362531, Circuit Court for Montgomery County, Maryland.

(Reporting by Sakthi Prasad in Bangalore; Editing by Richard Pullin)

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