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GlaxoSmithKline PLC on Wednesday said it reached an agreement to acquire late-stage biopharmaceutical company Sierra Oncology Inc for $1.9 billion, or £1.5 billion.
The Brentford, England-based pharmaceutical firm has agreed to pay $55 per Sierra share in cash.
California-based Sierra focuses on targeted therapies for the treatment of rare forms of cancer.
GlaxoSmithKline said that the acquisition will complement its commercial and medical expertise in haematology - diseases related to blood. Further, it will support the development of its portfolio of new speciality medicines and vaccines.
At the end of 2021, the value of Sierra's gross assets totalled $109 million and it generated a net loss of $95 million for the year.
The transaction is expected to close in the third quarter of 2022 ‘or before’ and is dependent on regulatory and shareholder approval.
GSK will account for the transaction as a business combination and expects it to be accretive to adjusted earnings per share in 2024. Sales contributions are anticipated to start in 2023 with potential for significant growth thereafter, it noted.
Shares in GlaxoSmithKline were up 0.3% at 1,789.00 pence each on Wednesday morning in London, giving it a market capitalisation of just under £91 billion.
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