GSK plc has announced its largest acquisition in more than a decade with an agreement to buy U.S. cancer drug developer Nuvalent Inc for US$10.6 billion (A%15.1 billion).
The British pharmaceutical giant said the all-cash transaction valued Boston-based Nuvalent at $124 per share, representing a 40% premium to the last closing price.
Chief Executive Luke Miels said the acquisition was consistent with GSK’s strategy of pursuing medicines with validated targets that addressed shortcomings in treatments.
The deal provides GSK with two late-stage lung cancer medicines under review by the United States Food and Drug Administration (FDA) which could reach the market this year, a third clinical-stage asset and a broader pipeline of targeted cancer therapies.
"Today's acquisition is a multi-product deal," Miels said in a press release.
"The two lead products are potential best-in-class assets that could launch this year if approved by the FDA and offer significant new treatment options to patients with two forms of non-small cell lung cancer."
The purchase represents a strategic shift under Miels, who became CEO of GSK in January, with this deal exceeding the acquisition size expected by investors which had been in the $2 billion to $4 billion range.
Analysts broadly welcomed the acquisition, with Bank of America describing the transaction as a "bold move" that adds two near-term growth drivers to GSK's oncology portfolio, according to this Reuters report.
Nuvalent Chief Executive Officer James Porter said that since its founding, the company had leveraged deep expertise in chemistry and structure-based drug design to develop a portfolio of novel, potentially best-in-class kinase inhibitors.
“We’re excited that GSK has recognised the significant value these programmes can offer patients and shares our vision for practice-changing innovation,” Porter said in the press release.
Nuvalent (NASDAQ: NUVL) shares soared to close $34.76 (39.28%) higher at $123.25 on Tuesday (Wednesday AEST), capitalising the company at $9.74 billion, after trading up to a record high of $123.62.
Formerly known as GlaxoSmithKline, GSK (LON: GSK) shares closed £6.50 (0.34%) down at £1,906.50, giving it a market valuation of £77.22 billion (US$103.5 billion).
