GlaxoSmithKline plc (GSK,GSK.L), on Wednesday, announced an agreement to acquire late-stage biopharmaceutical company Sierra Oncology Inc. (SRRA) for $55 per share of common stock in cash representing an approximate total equity value of $1.9 billion.
As per the terms of the agreement, the acquisition will be effected through a one-step merger in which the shares of Sierra Oncology outstanding will be cancelled and converted into the right to receive $55 per share in cash.
Further, GSK will account for the transaction as a business combination and expects it to be accretive to adjusted EPS in 2024, the expected first full year of momelotinib's sales.
In addition, new GSK reaffirmed its full-year 2022 guidance, the medium-term outlook for 2021-2026 of more than 5% sales and 10% adjusted operating profit CAGR at constant exchange rate or CER, and long-term sales ambition.
As of 31 December 2021, the value of the gross assets of Sierra Oncology to be acquired is $109 million. The net losses of the business were $95 million for the 12 months ended 31 December 2021.
Sierra Oncology's differentiated momelotinib has the potential to address the critical unmet medical needs of myelofibrosis patients with anaemia.
Momelotinib complements GSK's Blenrep, building on GSK's commercial and medical expertise in haematology, with Sierra Oncology anticipating US regulatory submission in Q2 this year and EU submission in the second half of 2022.
The company noted that the proposed acquisition aligns with GSK's strategy of building a strong portfolio of new specialty medicines and vaccines.
If the transaction is completed and momelotinib is approved by regulatory authorities, GSK stated that it expects momelotinib will contribute to GSK's growing specialty medicines business, with sales expected to begin in 2023, with significant growth potential and a positive benefit to the Group's adjusted operating margin in the medium term.
For comments and feedback contact: editorial@rttnews.com
Business News