GSK Acquires Sierra in $1.9B Complimentary Deal Aimed at Rare Cancers

GSK_Leon Neal/Getty Images

Leon Neal/Getty Images

GlaxoSmithKline is acquiring California biopharmaceutical firm Sierra Oncology for $1.9 billion in a deal expected to help both companies take a major step in developing a treatment for rare types of cancer.

The deal values Sierra's shares at $55 each. The takeover will happen via a one-step merger that will cancel all outstanding shares in Sierra and convert these into the right to receive the per-share price in cash. The merger needs to be approved by at least a majority of the issued and outstanding shares to push through, plus regulatory and other customary conditions. The transaction is expected to close on or before the third quarter of 2022.

Central to the takeover is Sierra's momelotinib, which with GSK's expertise in hematology, may be developed to create therapies that address many critical unmet needs of patients diagnosed with myelofibrosis with anemia. Myelofibrosis is a fatal type of cancer of the bone marrow.

Most patients with the disorder are treated with JAK inhibitors that typically require transfusions. However, over 30% of patients discontinue their treatment regimen because of anemia. In fact, around 40% of patients are already anemic at the time of diagnosis. Because of transfusion dependence and anemia, many patients have low overall survival rates.

"Sierra Oncology complements our commercial and medical expertise in hematology. With this proposed acquisition, we have the opportunity to potentially bring meaningful new benefits to patients and further strengthen our portfolio of specialty medicines," said Luke Miels, chief commercial officer of GSK, in a press release.

Momelotinib encourages inhibitory activity along key signaling pathways and can reduce the need for transfusions while addressing symptoms. Topline results from Sierra Oncology's Phase III MOMENTUM trial shared in January 2022 demonstrated the drug's ability to achieve clinically meaningful outcomes in splenic response, anemia and symptoms. Complete data on the study will be shared at an upcoming medical conference.

The drug complements GSK's Blenrep (belantamab mafodotin), which leverages the company's commercial and medical hematology resources and expertise. Once the merger is completed and momelotinib gets regulatory approval, GSK expects to use it to grow its specialty medicines unit and start bringing in sales in 2023.

"Uniting with GSK creates the best opportunity for Sierra Oncology to realise its mission of delivering targeted therapies that treat rare forms of cancer while also delivering compelling and certain value for our stockholders," noted Sierra president and chief executive officer Stephen Dilly, MBBS, PhD.

In addition to momelotinib, Sierra has two other assets in its pipeline: SRA515, a selective bromodomain-containing protein 4 bromodomain and extra-terminal domain (BET) inhibitor that affects protein bromodomains, and SRA737, a checkpoint kinase 1 inhibitor.

GSK is represented by financial advisor PJT Partners and law firm Cleary Gottlieb Steen & Hamilton, while Sierra Oncology is represented by financial advisor Lazard and law firm Wilson Sonsini Goodrich & Rosati.

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