Sierra Oncology Stock Soars After $1.9 Billion Takeover by GlaxoSmithKline
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GlaxoSmithKline
has agreed to buy U.S. rare cancer therapy company
Sierra Oncology
for $1.9 billion in cash, as it looks to boost its portfolio of new specialty medicines.
The U.K. drugmaker will pay $55 a share to buy San Mateo, California-based Sierra Oncology (ticker: SRRA), Glaxo (GSK) said in a statement on Wednesday, representing a 39% premium to Sierra’s closing price of $39.52 on Tuesday. Sierra Oncology shares were soaring 37.9% to $54.50 in premarket trading Wednesday. American depositary receipts of Glaxo were up 0.3%.
Investors holding about 28% of Sierra’s stock have agreed to vote in favor of the deal, GlaxoSmithKline said.
The acquisition of Sierra comes as GlaxoSmithKline Chief Executive Emma Walmsley faces pressure to reinvigorate the company’s lackluster drug pipeline ahead of a planned spinoff of its consumer health venture with
Pfizer
(PFE) in July.
Sierra focuses on targeted therapies for the treatment of rare forms of cancer. In January, the company said it planned to file for marketing approval in the U.S. for momelotinib, its experimental drug for anemic patients with a type of bone marrow cancer, in the second quarter of this year.
The momelotinib treatment may have beneficial effects on anemia and reduce the need for transfusions, GlaxoSmithKline said on Wednesday.
Sierra had $109 million of gross assets at the end of December, and the company reported a net loss of $95 million in 2021.
Write to Lina Saigol at lina.saigol@dowjones.com
