GlaxoSmithKline agreed to a $1.9 billion deal to buy U.S. medicine producer Sierra Oncology on Wednesday, the latest step to fight off activist shareholder Elliott.
Since Elliott purchased a major interest in GSK last year, the business has been under increasing pressure to improve its therapeutic pipeline.
The agreement comes as the corporation plans to spin off its huge consumer healthcare business, which includes brands like Sensodyne toothpaste and Advil pain relievers, in July, in the company's biggest shake-up in two decades.
Sierra shareholders will get $55 per share of common stock in cash, according to GSK. Sierra specialises on tailored treatments for the treatment of uncommon cancers.
That's a 39 percent premium over Tuesday's closing price and over two-thirds more than the volume-weighted average price over the previous 30 trading days, according to the company. GSK's stock was up 0.2 per cent in early London trading.
Sierra expects to submit an application for marketing authorisation in the United States in the second quarter for its investigational medicine momelotinib, which is being developed to treat anaemia in patients with myelofibrosis, a kind of bone marrow malignancy.
In January, late-stage clinical trial data revealed that the medicine was effective in decreasing disease symptoms and reducing patients' need for blood transfusions.
The deal is anticipated to finalise in the third quarter and will complement Blenrep, GSK's treatment for multiple myeloma, a kind of blood cancer, according to the company.
Last year, GSK's oncology division accounted for around 2.8 percent of the company's overall pharmaceutical sales.
According to H.C. Wainwright's Joseph Pantginis, who wrote an analyst note in late January, momelotinib, which Sierra acquired from Gilead Sciences in 2018 for $198 million including milestone payments, could generate $950 million in peak sales in the United States and $780 million in peak sales outside the United States.
GSK has seen multiple trial setbacks in the last year on the cancer drugs bintrafusp alfa and feladilimab, both of which were earlier regarded as potential billion-dollar sellers.
It will lose patent exclusivity on the HIV medicine dolutegravir, which is valued roughly 3 billion pounds ($3.9 billion) each year, at the end of 2027.
GSK and iTeos Therapeutics Inc agreed in June to pay up to $2 billion to research and sell a potential cancer medication together.
(Source:www.financialpost.com)
Since Elliott purchased a major interest in GSK last year, the business has been under increasing pressure to improve its therapeutic pipeline.
The agreement comes as the corporation plans to spin off its huge consumer healthcare business, which includes brands like Sensodyne toothpaste and Advil pain relievers, in July, in the company's biggest shake-up in two decades.
Sierra shareholders will get $55 per share of common stock in cash, according to GSK. Sierra specialises on tailored treatments for the treatment of uncommon cancers.
That's a 39 percent premium over Tuesday's closing price and over two-thirds more than the volume-weighted average price over the previous 30 trading days, according to the company. GSK's stock was up 0.2 per cent in early London trading.
Sierra expects to submit an application for marketing authorisation in the United States in the second quarter for its investigational medicine momelotinib, which is being developed to treat anaemia in patients with myelofibrosis, a kind of bone marrow malignancy.
In January, late-stage clinical trial data revealed that the medicine was effective in decreasing disease symptoms and reducing patients' need for blood transfusions.
The deal is anticipated to finalise in the third quarter and will complement Blenrep, GSK's treatment for multiple myeloma, a kind of blood cancer, according to the company.
Last year, GSK's oncology division accounted for around 2.8 percent of the company's overall pharmaceutical sales.
According to H.C. Wainwright's Joseph Pantginis, who wrote an analyst note in late January, momelotinib, which Sierra acquired from Gilead Sciences in 2018 for $198 million including milestone payments, could generate $950 million in peak sales in the United States and $780 million in peak sales outside the United States.
GSK has seen multiple trial setbacks in the last year on the cancer drugs bintrafusp alfa and feladilimab, both of which were earlier regarded as potential billion-dollar sellers.
It will lose patent exclusivity on the HIV medicine dolutegravir, which is valued roughly 3 billion pounds ($3.9 billion) each year, at the end of 2027.
GSK and iTeos Therapeutics Inc agreed in June to pay up to $2 billion to research and sell a potential cancer medication together.
(Source:www.financialpost.com)
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