RARE Daily

GSK to Acquire Rare Cancer Biotech Sierra Oncology For $1.9 Billion

April 13, 2022

Rare Daily Staff

GlaxoSmithKline and Sierra Oncology have entered into an agreement under which GSK will acquire Sierra Oncology, a late-stage biopharmaceutical company focused on targeted therapies for the treatment of rare forms of cancer, for $55 per share of common stock in cash, a 39 percent premium from its closing price before the announcement and representing an approximate total equity value of $1.9 billion.

The deal supports GSK’s strategy of developing a strong portfolio of new specialty medicines and vaccines, giving it access to momelotinib, which was first developed by YM BioSciences and acquired by Gilead Biosciences when it bought the company for $510 million. Gilead sold it to Sierra Oncology in 2018 for $3 million and royalties following a late-stage failure.

Since then, Sierra has developed momelotinib as a treatment for myelofibrosis, a rare fatal cancer of the bone marrow where fibrous scar tissue gradually replaces normal bone marrow, limiting its ability to make blood cells. This may cause anemia (reduced red blood cells), leading to shortness of breath or fatigue; increased risk of infection due to decreased white blood cells; or increased risk of bleeding or bruising due to reduced platelet counts. At diagnosis, approximately 40 percent of patients are already anemic, and it is estimated that nearly all patients will eventually develop anemia. Patients treated with a JAK inhibitor will often require transfusions, and more than 30 percent will discontinue treatment due to anemia. Myelofibrosis affects approximately 20,000 patients in the United States.

Momelotinib has a differentiated mode of action with inhibitory activity along key signaling pathways. This activity may lead to beneficial treatment effects on anemia and reduce the need for transfusions while also treating symptoms. In January 2022, Sierra Oncology reported positive topline results from the MOMENTUM phase 3 trial in myelofibrosis. The study met all its primary and key secondary endpoints, demonstrating that momelotinib achieved a statistically significant and clinically meaningful benefit on symptoms, splenic response, and anemia. Sierra anticipates a U.S. regulatory submission in the second quarter of this year and an EU submission in the second half of 2022.

“Sierra Oncology complements our commercial and medical expertise in hematology. Momelotinib offers a differentiated treatment option that could address the significant unmet medical needs of myelofibrosis patients with anemia, the major reason patients discontinue treatment,” said Luke Miels, chief commercial officer, GSK.

Under 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. Subject to customary conditions, including the approval of the merger by at least a majority of the issued and outstanding shares of Sierra Oncology, and the expiration or earlier termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the transaction is expected to close in the third quarter of 2022 or before.

Sierra Oncology’s Board of Directors has unanimously recommended that Sierra’s stockholders vote in favor of the approval of the merger. Additionally, stockholders of Sierra Oncology holding approximately 28 per cent of Sierra’s outstanding shares, have agreed to vote their shares in favor of approval of the merger.

“Uniting with GSK creates the best opportunity for Sierra Oncology to realize its mission of delivering targeted therapies that treat rare forms of cancer while also delivering compelling and certain value for our stockholders,” said Stephen Dilly, president and CEO, Sierra Oncology. “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.”

Photo: Stephen Dilly, president and CEO, Sierra Oncology


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