GlaxoSmithKline is looking for assets to build its drug portfolio, with the pharma giant securing a sizable $1.9 billion deal. Acquisition of Sierra Oncology, a company whose lead product candidate is an expected blockbuster, is now preparing to submit it to the FDA. That’s a lot of money for a drug that Gilead Sciences gave up and was acquired by Sierra for a pittance.
Under the terms of the deal announced Wednesday, GSK will buy San Mateo, Calif.-based Sierra shares for $55 a share, a nearly 40% premium to the stock’s closing price on Tuesday. The premium reflects the promise of momelotinib, a drug developed by Sierra to treat myelofibrosis, a rare blood cancer.The deal is three months later Sierra reports positive Phase 3 data, supporting the case for its drug as a better treatment option Blockbuster drug for myelofibrosis sold by Incyte.
Myelofibrosis is a cancer of the bone marrow that causes inflammation and scar tissue that damages the production of red blood cells. The result is anemia requiring blood transfusions. Momelotinib is a small molecule designed to block the Janus kinase (JAK) enzyme. The Incyte drug Jakafi is also a JAK inhibitor. But the drug can suppress the bone marrow, further causing anemia. This limitation prevents Jakafi from being used as a first-line therapy for myelofibrosis.
In addition to blocking two JAK enzymes, momilotinib also blocks a third enzyme, ALK2. Sierra has said this different approach makes its drug better at addressing anemia caused by myelofibrosis. In a head-to-head test of Sierra’s momelotinib against Incyte’s Jakafi, Sierra reported that momelotinib resulted in an increase in hemoglobin and a decrease in the need for blood transfusions. This transfusion independence is associated with longer lifespans for patients.
Momelotinib’s origins can be traced back to YM Biosciences, the biotech company Gilead acquired in 2012 for $510 million.Under Gilead’s leadership, the small molecule reached Phase 3 testing, but released The results were mixedleading the pharmaceutical company to stop further research on the drug. Sierra pays Gilead $3 million for momilotinibThe 2018 deal also puts Gilead on track for up to $190 million in milestone payments, including a $25 million milestone payment if Sierra gets regulatory approval.
The Sierra acquisition comes at a time of transition for GSK.The London-based pharma giant is preparing to spin off its consumer products this summer into Independent company, HaleonMeanwhile, GSK has been focusing on specialty drugs and vaccines.GSK says momilotinib helps expand company’s offering in blood cancers, adding Multiple Myeloma Drug Blenrep Approved in 2020. GlaxoSmithKline (GSK) has previously said it would be willing to write big checks for cancer drugs. In 2018, it hit a Immuno-oncology company Tesaro to be acquired for $5.1 billion.
Luke Miels, Chief Commercial Officer, GlaxoSmithKline tell Bloomberg GlaxoSmithKline is looking for additional deals in disease areas where the company has deep market knowledge. Many drugmakers, such as Sierra, have moved into “price ranges that we think are reasonable,” he said. “When I look at this deal we just executed, the $1.9 billion Phase 3 validated, pending oncology asset is a very good price.”
Sierra said it expects to submit momelotinib for FDA review in the second quarter of this year; the EU could submit an application in the second half of 2022. If approved, GSK said it expects the drug to start selling in 2023.
The acquisition has been approved by Sierra’s board of directors, but still requires shareholder approval. The two companies expect to close the deal in the third quarter of this year, if not sooner. If another buyer made a better offer, Sierra would have to pay GSK a $70 million termination fee to get out of the deal. Merger Agreement.
Photo by GlaxoSmithKline
