Prior to the open of U.S. markets today, late-stage drug development company Sierra Oncology (SRRA:NASDAQ), which is engaged in discovering and delivering targeted therapies for hematological disorders and rare cancers, announced that it has entered into an agreement to be acquired by global healthcare firm GlaxoSmithKline (GSK:NYSE) in an all-cash transaction at a price of $55 per common share.
The company advised that the agreed upon $55 per share sale price equates to a total equity value of $1.9 billion (£1.5 billion). Sierra Oncology added that the offering price represents a 39% premium over its closing stock price yesterday and is 63% above the firm's 30-day volume-weighted average share price.
The firm listed that its highly differentiated momelotinib offers significant potential to meet critical unmet needs of patients diagnosed with myelofibrosis and anemia and explained that "myelofibrosis is a fatal cancer of the bone marrow impacting the normal production of blood cells."
It is believed that momelotinib is a complementary addition to GSK's hematology portfolio and fits well with its strategy of building an advanced specialty medicines and vaccines portfolio. The firm stated that it expects to submit a U.S. filing in Q2/22 and complete a similar filing in the EU in H2/22.
The company stated that about 40% of patients diagnosed with myelofibrosis are already anemic and eventually 100% of them will develop anemia and indicated that momelotinib may provide positive treatment effects on anemia which could possibly reduce the need for burdensome transfusions.
Sierra Oncology mentioned that in January of 2022 it announced positive topline data from its Phase 3 MOMENTUM study of momelotinib that demonstrated statistically significant and clinically meaningful benefits on symptoms, splenic response and anemia.
GlaxoSmithKline's Chief Commercial Officer Luke Miels commented, "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. With this proposed acquisition, we have the opportunity to potentially bring meaningful new benefits to patients and further strengthen our portfolio of specialty medicines."
Sierra Oncology's President and CEO Stephen Dilly, MBBS, Ph.D. remarked, "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. 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."
Sierra's Board of Directors unanimously recommends that its shareholders vote in favor of the sale. The merger is expected to close in Q3/22 subject to ordinary closing conditions, Sierra Oncology shareholder approval and regulatory approvals under the Hart-Scott-Rodino Antitrust Improvements Act.
Sierra Oncology is a late-stage biopharma firm that focuses on developing targeted treatments for rare types of cancer. The company's approach is to seek out compounds that target root causes of disease and integrate them with its cancer biology expertise to create new targeted therapies.
GlaxoSmithKline is a U.K.-based global healthcare firm that develops and markets a wide range of range of products in the areas of pharmaceuticals, vaccines and consumer healthcare. The company currently has a market cap of approximately US$118 billion.
Sierra Oncology started the day with a market cap of around $935.2 million with approximately 23.66 million shares outstanding and a short interest of about 6.2%. SRRA shares opened almost 38% higher today at $54.48 (+$14.96, +37.85%) over yesterday's $39.52 closing price and reached a new 52-week high price this morning of $54.97. The stock has traded today between $54.42 and $54.97 per share and is currently trading at $54.73 (+$15.21, +38.49%).
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