GlaxoSmithKline plc (LSE/NYSE:GSK) has reached a deal to acquire Sierra Oncology (Nasdaq:SRRA) to bolster its oncology pipeline.
Under the terms of the proposed deal, GSK would pay $44 per share for a total value of approximately $1.9 billion.
GSK shares were mostly flat in mid-day trading, dipping 0.032% to $46.52. SRRA shares surged 38.31% to $54.66.
Sierra Oncology’s differentiated momelotinib, which inhibits JAK1 and JAK2, offers potential for patients with myelofibrosis, a rare bone marrow cancer. Myelofibrosis can lead to scarring in the bone marrow, thus causing severe anemia.
GSK expects to benefit from sales of momelotinib starting in 2023, with growth ramping up after that.
There is a significant unmet need for patients with myelofibrosis. Roughly 40% of patients diagnosed with myelofibrosis are already anemic, with the majority developing anemia eventually.
Momelotinib has been the subject of 22 clinical trials to date.
Earlier this year, Sierra Oncology announced positive topline data from the MOMENTUM Phase 3 study. The drug candidate met all of its primary and key secondary endpoints.
“Sierra Oncology complements our commercial and medical expertise in hematology,” Luke Miels, chief commercial officer at GSK.
“Now we have a partner with a global infrastructure and oncology expertise that enables us to deliver momelotinib to patients as quickly as possible and on a global scale,” said Stephen Dilly, president and CEO at Sierra Oncology.
The acquisition is subject to customary closing conditions.