GlaxoSmithKline is trying to find property to construct up its drug portfolio and the pharmaceutical large is getting a giant one via a $1.9 billion deal to accumulate Sierra Oncology, an organization whose lead product candidate is a projected blockbuster vendor that’s now being readied for submission to the FDA. It’s a hefty sum for a drug that Gilead Sciences deserted and was scooped up by Sierra for a pittance.
Beneath the phrases of the acquisition settlement introduced Wednesday, GSK pays $55 for every share of San Mateo, California-based Sierra, an almost 40% premium to the inventory’s Tuesday closing worth. The premium displays the promise of momelotinib, a drug Sierra developed to deal with the uncommon blood most cancers myelofibrosis. The deal comes three months after Sierra reported constructive Part 3 knowledge supporting the case that its drug is a greater therapy possibility than a blockbuster drug that Incyte markets for myelofibrosis.
Myelofibrosis is bone marrow most cancers that results in irritation and scar tissue impairing the manufacturing of pink blood cells. The result’s anemia that requires therapy with blood transfusions. Momelotinib is a small molecule designed to dam Janus kinase (JAK) enzymes. Incyte drug Jakafi can also be a JAK inhibitor. However that drug can suppress the bone marrow, additional contributing to anemia. That limitation prevents Jakafi from use as a first-line remedy for myelofibrosis.
Along with blocking two JAK enzymes, momelotinib blocks a 3rd enzyme, ALK2. Sierra has mentioned this this completely different strategy permits its drug to higher handle the anemia brought on by myelofibrosis. In a head-to-head check pitting Sierra’s momelotinib towards Incyte’s Jakafi, Sierra reported that momelotinib led to will increase in hemoglobin and a lowered want for blood transfusions. This transfusion independence is related to bettering how for much longer sufferers reside.
Momelotinib traces its origins to YM Biosciences, a biotech that Gilead acquired for $510 million in 2012. Beneath Gilead, the small molecule reached Part 3 testing however posted blended outcomes, main the pharmaceutical firm to cease additional work on the drug. Sierra paid Gilead $3 million to accumulate momelotinib. That 2018 deal additionally put Gilead in line for as much as $190 million in milestone funds, together with a $25 million milestone if Sierra secures regulatory approval.
The Sierra acquisition comes at a time of transition for GSK. The London-based pharmaceutical large is making ready a by-product this summer time of its client merchandise right into a standalone firm, Haleon. On the identical time, GSK has been honing its concentrate on specialty medicines and vaccines. GSK mentioned momelotinib helps construct out the corporate’s choices in blood cancers, complementing Blenrep, a a number of myeloma drug accredited in 2020. GSK has beforehand proven its willingness to write down huge checks to get most cancers medication. In 2018, it struck a $5.1 billion deal to accumulate immuno-oncology firm Tesaro.
Luke Miels, GSK’s chief business officer, instructed Bloomberg that GSK is on the lookout for bolt-on offers in illnesses areas the place the corporate has a deep understanding of the market. Quite a few drugmakers, reminiscent of Sierra, have entered “a worth vary that we expect is wise,” he mentioned. “Once I have a look at this transaction we simply executed, $1.9 billion for a Part 3-validated, about-to-file oncology asset is an excellent worth.”
Sierra mentioned it expects to submit momelotinib for FDA evaluate within the second quarter of this 12 months; a European Union submission might comply with within the second half of 2022. If accredited, GSK mentioned that it expects the drug might begin recording gross sales in 2023.
The acquisition already has the approval of Sierra’s board of administrators, however it nonetheless wants stockholder approval. The businesses count on to shut the transaction within the third quarter of this 12 months, if not sooner. If one other purchaser emerges with a greater provide, Sierra should pay GSK a $70 million termination price to get out of the deal, in line with the merger settlement.
Photograph by GlaxoSmithKline