GSK added to a series of recent biotech takeovers Tuesday with the $2 billion acquisition of Bellus Health. The deal sent BLU stock and GSK stock in opposite directions.
The deal adds to GSK's pipeline of respiratory drugs. Bellus is working on a treatment for refractory chronic cough called camlipixant. Camlipixant works by blocking a receptor called P2X3 which is tied to hypersensitivity in the cough reflex. The drug is currently in Phase 3 testing.
Patients suffering from refractory chronic cough can experience more than 900 coughs a day, said Luke Miels, GSK's chief commercial officer.
"Camlipixant, a novel, highly selective P2X3 antagonist, has the potential to be a best-in-class treatment with significant sales potential," he said in written remarks. "This proposed acquisition complements our portfolio of specialty medicines and builds on our expertise in respiratory therapies."
On the stock market today, BLU stock almost doubled. Shares skyrocketed 98.9% to close at 14.44. GSK stock, on the other hand, sank 1.6%, ending the regular session at 36.78.
BLU Stock: 28 Million Patients
Under the terms of the deal, GSK will pay $14.75 per share of BLU stock. That puts the total deal value at about $2 billion.
GSK estimates 28 million patients suffer from chronic cough worldwide. Of those, 10 million deal with the condition for more than a year, including 6 million in the U.S. and Europe.
Most patients, 53%, also experience depression and about half experience urinary incontinence. Patients have also reported rib fractures, social withdrawal and loss of sleep.
GSK expects camlipixant to gain regulatory approval in 2026. After that, the company expects the Bellus acquisition to be accretive to adjusted earnings from 2027 beyond. The deal "has the potential to deliver significant sales through 2031 and beyond," GSK said in a news release.
The deal follows Merck's plan Monday to buy Prometheus Bio for $10.8 billion.
GSK Stock Has Middling Ratings
BLU stock, which has long traded below 10, hit a record high on the takeover news. Shares went public in 2019 and hit a low around 2 the following year.
Despite soaring to a record high at 12.69 last August, Bellus shares have pulled back this year. The merger news Tuesday helped them retake their key moving lines, according to MarketSmith.com.
GSK stock remains above its key moving averages, but shares have middling ratings across the board, IBD Digital shows.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
