GSK to acquire rare cancer drug developer IDRx for up to £1 billion
- GSK will pay $1 billion upfront to acquire the Massachusetts-based company
- IDRx develops a treatment for gastrointestinal stromal tumors (GIST)
GSK has agreed to acquire US biopharmaceutical company IDRx in a deal worth up to $1.15 billion (£1 billion).
Under the agreement, GSK will pay $1 billion upfront 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 annually.
Current treatments for GIST are ineffective: 90 percent of patients develop new mutations that usually cause relapse.
However, GSK noted that IDRx’s experimental therapy – IDRX-42 – showed signs of preventing tumor growth.
The U.S. Food and Drug Administration recently gave IDRX-42 fast-track designation for the treatment of patients with GIST who had shown resistance to other drugs such as imatinib.
Acquisition: GSK has agreed to acquire US biopharmaceutical company IDRx
Tim Clackson, CEO of IDRx, noted that “there hasn’t been major progress in the standard of care in almost two decades.”
He added: ‘Combining our experience to date with GSK’s gastrointestinal cancer expertise, global clinical development capabilities 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 during 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 under investor pressure in recent years under CEO Emma Walmsley.
It acquired TESARO, developer of the ovarian cancer drug Zejula, for £4 billion in 2019 before acquiring California-based rare cancer specialist Sierra Oncology in a £1.5 billion deal three years later.
But oncology drugs make up a small portion of GSK’s overall business, accounting for less than 5 percent ($373 million) of its $8 billion in third-quarter sales.
During the period, the company generated $2.65 billion in vaccine sales, $1.75 billion in HIV-related treatments and more than $1.6 billion in respiratory drug orders.
GSK Chief Commercial Officer Luke Miels said the acquisition of IDRx is “consistent with our approach to acquiring assets that address validated targets and where there is a clear unmet medical need, despite existing approved products.”
GSK shares were 0.8 percent lower at 1,339 cents on Monday morning and are still down about 15 percent over the past year.
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