The move also comes just ahead of the drugmaker’s planned spinoff of its consumer health division into a new company called Haleon.

Under the terms of the deal expected to close some time in the third quarter if not earlier, shareholders of California-headquartered Sierra will receive $55 per share of common stock in cash. This represents a 39% premium to the company’s closing price just prior to the announcement and a 63% premium to its volume-weighted average price over the last 30 trading days.

With the buy, GSK will gain access to a drug being trialed on anemic patients with myelofibrosis, a fatal type of bone marrow cancer. The future owner sees “significant growth potential” for the treatment that it said complements its own expertise in hematology, which includes products such as Blenrep, a treatment for another multiple myeloma.

Results of Sierra’s late-stage clinical trial released at the beginning of 2022 showed that momelotinib could reduce disease symptoms and remove some patients’ dependence on blood transfusions. The US company expects regulatory submissions to health authorities in both the US and Europe during 2022.

The new acquisition, which will considerably bolster Glaxo’s presence in the oncology sector, expected to begin making a sales contribution in 2023, and one analyst has forecast peak revenue of about £1.3 billion. The pharma giant will account for the transaction as a business combination and expects it to be accretive to adjusted per-share earnings in 2024.

In 2021, cancer treatment accounted for only about 2.8% of the British drugmaker’s total pharmaceutical sales. In June last year, GSK agreed to pay as much as $2 billion to iTeos Therapeutics to collaborate on a potential cancer treatment.

Analysts anticipate that GSK will make additional bolt-on acquisitions when it completes the spinoff of the consumer business. This will give the company around £7 billion in cash to spend on potential blockbusters and help to keep corporate predators at bay.

Author: Dede Williams, Freelance Journalist