GlaxoSmithKline said Wednesday it will buy Sierra Oncology for $1.9 billion, sending the biotech stock flying as Halozyme Therapeutics announced its $960 million Antares Pharma matchup.
The former deal adds Sierra's momelotinib to Glaxo's pipeline. Momelotinib could potentially treat an uncommon form of blood cancer called myelofibrosis that can cause anemia. Glaxo expects the drug to launch in 2023 and calls for "significant growth potential thereafter."
Meanwhile, Halozyme will add an auto injector to its wheelhouse. Auto injectors are designed to deliver specific drug doses. Halozyme said it plans to expand patent protection for the technology beyond, and expects "multiple tens of billions of dollars in estimated peak sales."
On today's stock market, biotech stock Sierra surged 38.5% to 54.75. Antares stock rocketed 49.2% to 5.58. Shares of Glaxo and Halozyme were more muted. Glaxo stock rose a fraction to 46.85 and Halozyme stock dipped 0.4% to 41.46.
Biotech Stock Takes On Incyte, Novartis
Glaxo's Sierra buyout comes three months after the latter company reported a clean sweep for its lead drug in Phase 3 testing.
In the study, Sierra focused on momelotinib's ability to tackle anemia for myelofibrosis patients. After 24 weeks of treatment, 31% of patients no longer needed transfusions. That compares with 20% who received a standard steroid to manage their anemia.
The drug also showed no signs of inferiority to the steroid at treating anemia. That suggests it could have a leg-up on chief rival Jakafi. Jakafi, from Incyte and Novartis, treats myelofibrosis. But it can cause anemia, rather than treat it. The results sent the biotech stock flying more than 46% and helped validate Sierra's decision to pick up momelotinib from Gilead Sciences for $198 million in 2018.
"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," Glaxo's Chief Commercial Officer Like Miels said in a written statement.
Glaxo will pay $55 per share of the biotech stock. The deal is at a 39% premium to Sierra's closing price on Tuesday. The companies expect the close the transaction in the third quarter or before. In 2024, Glaxo says the deal will be accretive to adjusted profit.
Halozyme Expects Immediate Accretion
Halozyme will pay $5.60 per share of Antares stock in a deal expected to close in the first half of this year. The company expects the buyout to be immediately accretive to sales and adjusted profit. Halozyme also called for both measures to accelerate through 2027.
Antares' technology is already tied to three commercial products, Halozyme said.
"The addition of Antares, particularly with its best-in-class auto injector platform and specialty commercial business, augments Halozyme's strategy, further strengthens our position as a leading drug delivery company and extends our strategy to include specialty products," Chief Executive Helen Torley said in a written statement.
Biotech stock Halozyme has been on a run recently, surging by nearly a third off a year-low in late January.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
