By Ian Walker and Joe Hoppe

 

Pharmaceutical giant GlaxoSmithKline PLC said Wednesday that it is buying biopharmaceutical company Sierra Oncology Inc. for $1.9 billion as it complements its own expertise, and backed its guidance.

GlaxoSmithKline will pay $55 per share in cash, a 39% premium to its closing price of $39.52 on Tuesday. The deal has the support of Sierra's board as well as shareholders owning 28% of its stock.

The acquisition is expected to close in the third quarter of 2022 or earlier. Glaxo forecasts that the purchase will be accretive to its adjusted earnings per share by 2024, the expected first full year of sales of Sierra's flagship treatment, differentiated momelotinib.

Glaxo said differentiated momelotinib is a potential treatment for patients with both myelofibrosis--a fatal bone marrow cancer--and anemia, a high unmet medical need.

The treatment complements Glaxo's own existing portfolio and is set for both a U.S. regulatory submission in the second quarter and a European submission in the second half. Sales contributions are expected to start in 2023, with significant growth potential thereafter.

Glaxo reaffirmed its guidance. It expects 2021-2026 sales growth of more than 5% and for 10% adjusted operating profit.

 

Write to Ian Walker at ian.walker@wsj.com

 

(END) Dow Jones Newswires

April 13, 2022 03:09 ET (07:09 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.
Sierra Oncology (NASDAQ:SRRA)
Historical Stock Chart
From Oct 2022 to Nov 2022 Click Here for more Sierra Oncology Charts.
Sierra Oncology (NASDAQ:SRRA)
Historical Stock Chart
From Nov 2021 to Nov 2022 Click Here for more Sierra Oncology Charts.