Home Money GSK to buy rare cancer drug developer IDRx for up to £1bn

GSK to buy rare cancer drug developer IDRx for up to £1bn

0 comments
Acquisition: GSK agreed to buy US biopharmaceutical company IDRx
  • GSK to pay $1 billion upfront to acquire Massachusetts-based company
  • IDRx is developing a treatment for gastrointestinal stromal tumors (GIST)

GSK has agreed to buy US biopharmaceutical company IDRx in a deal worth up to $1.15bn (£1bn).

Under the deal, GSK will pay $1 billion up front to acquire the Massachusetts-based company, followed by up to $150 million in “success-based” milestone payments.

IDRx is developing a treatment for gastrointestinal stromal tumors (GIST), a rare cancer that develops in the digestive system and is diagnosed in 80,000 to 120,000 new patients each year.

Current treatments for GIST are ineffective and 90 percent of patients develop new mutations that usually cause relapse.

However, GSK noted that IDRx’s experimental therapy, IDRX-42, was showing signs of impeding tumor growth.

The US Food and Drug Administration recently granted fast track designation to IDRX-42 for the treatment of patients with GIST who had shown resistance to other drugs such as Imatinib.

Acquisition: GSK agreed to buy US biopharmaceutical company IDRx

Tim Clackson, CEO of IDRx, noted that “there have been no major advances in the standard of care for almost 20 years.”

He added: “Combining our experience to date with GSK’s expertise in gastrointestinal cancers, global clinical development capability and strong commercial presence in oncology will help accelerate the development of this new medicine for patients.”

Funded by serial biotech entrepreneurs Christoph Lengauer and Ben Auspitz, IDRx was valued at $430 million in a funding round in August.

The company has received financial backing from private equity giant Blackstone, as well as venture capital firms RA Capital and Andreessen Horowitz.

GSK’s purchase of the group further expands its oncology portfolio, which has grown in recent years under chief executive Emma Walmsley amid pressure from investors.

It acquired TESARO, developer of ovarian cancer drug Zejula, for £4bn in 2019 before buying California-based rare cancer specialist Sierra Oncology in a £1.5bn deal sterling three years later.

But oncology drugs make up a small part of GSK’s overall business, responsible for less than 5 percent ($373 million) of its $8 billion in revenue in the third quarter.

During the period, the company enjoyed $2.65 billion in vaccine sales, $1.75 billion in sales of HIV-related treatments and more than $1.6 billion in respiratory drug orders.

Luke Miels, GSK’s chief commercial officer, said the acquisition of IDRx “is consistent with our approach of acquiring assets that address validated targets and where there is a clear unmet medical need, despite existing approved products.”

GSK shares They were down 0.8 per cent at 1,339 pence on Monday morning and have still fallen around 15 per cent over the past year.

DIY INVESTMENT PLATFORMS

Easy investing and ready-to-use portfolios

AJ Bell

Easy investing and ready-to-use portfolios

AJ Bell

Easy investing and ready-to-use portfolios

Free Fund Trading and Investment Ideas

Hargreaves Lansdown

Free Fund Trading and Investment Ideas

Hargreaves Lansdown

Free Fund Trading and Investment Ideas

Fixed fee investing from £4.99 per month

interactive inverter

Fixed fee investing from £4.99 per month

interactive inverter

Fixed fee investing from £4.99 per month

Get £200 back in trading fees

sax

Get £200 back in trading fees

sax

Get £200 back in trading fees

Free trading and no account commission

Trade 212

Free trading and no account commission

Trade 212

Free trading and no account commission

Affiliate links: If you purchase a This is Money product you may earn a commission. These offers are chosen by our editorial team as we think they are worth highlighting. This does not affect our editorial independence.

Compare the best investment account for you

You may also like