British pharmaceutical giant GlaxoSmithKline signed an agreement on Wednesday to acquire Canadian biotechnology company 35Pharma for $950 million in cash. The transaction, the second major acquisition under new CEO Luke Miels, aims to strengthen GSK's portfolio in the area of respiratory and cardiovascular diseases. The main asset of the acquired company is the early-stage drug candidate HS235, which has potential in treating pulmonary hypertension and metabolic disorders, including reducing adipose tissue.

Value and Nature of the Transaction

GSK is acquiring the Canadian, privately-held company 35Pharma for $950 million in an all-cash transaction. This is the company's second major acquisition under the leadership of new CEO Luke Miels, following the acquisition of RAPT Therapeutics for $2.2 billion in January.

Main Pharmaceutical Asset

The key asset of 35Pharma is the early-stage drug candidate named HS235, intended for treating various types of pulmonary hypertension – a life-shortening disease characterized by high blood pressure in the lungs. Its mechanism of action may also provide metabolic benefits, such as loss of adipose tissue.

GSK's Strategic Goal

The acquisition represents a clear shift in GSK's strategy, which had previously avoided direct entry into the competitive anti-obesity drug market. The transaction aims to strengthen the company's portfolio in the area of respiratory and cardiometabolic diseases and supplement its pipeline of new drugs.

Context of Other M&A Activities

The transaction with 35Pharma fits into GSK's broader activity in mergers and acquisitions. Earlier this week, the company acquired for a billion dollars the global rights to develop two siRNA therapies from Frontier Biotechnologies, targeting kidney diseases.

British pharmaceutical giant GlaxoSmithKline (GSK) has decided on a strategic acquisition, taking over Canadian biotechnology company 35Pharma Inc. for $950 million in cash. The transaction announced on Wednesday constitutes the second major acquisition move under the leadership of new CEO Luke Miels, who has been leading the company since January. Its goal is to rebuild and strengthen its own pipeline of new drugs, especially in the context of the impending loss of patent protection for one of GSK's key HIV drugs, which threatens a decline in revenue. The main subject of the transaction is the early-stage drug candidate with the codename HS235, developed by 35Pharma. This substance has potential in treating pulmonary hypertension – a serious, life-threatening disease characterized by high blood pressure in the lung vessels. According to information provided by the companies, HS235's mechanism of action may also provide metabolic benefits, such as reduction of adipose tissue. For GSK, which has consistently avoided the highly competitive and fast-growing market of anti-obesity drugs, this represents a clear change of course. The acquisition is intended to expand the company's portfolio in the area of respiratory and cardiometabolic diseases. GlaxoSmithKline, headquartered in the United Kingdom, is one of the world's largest pharmaceutical companies, with a long history in the areas of vaccines, drugs for respiratory diseases, and antiviral drugs, including for HIV. The market for cardiometabolic drugs, including anti-obesity drugs, is currently experiencing rapid growth, driven by the successes of companies such as Novo Nordisk and Eli Lilly, which is prompting other corporations to seek new opportunities in it. The transaction with 35Pharma fits into GSK's clearly increased activity in mergers and acquisitions since Miels took office. At the beginning of February, the company also announced a billion-dollar deal to acquire global rights to develop two small interfering RNA (siRNA) therapies from Frontier Biotechnologies, targeting kidney diseases. Earlier, in January, GSK acquired the American company RAPT Therapeutics for $2.2 billion. These moves indicate a strategy of supplementing its own research and development by acquiring promising external projects, which is intended to help mitigate the effects of upcoming patent expirations on key products.

Mentioned People

  • Luke Miels — New CEO of GlaxoSmithKline (GSK), under whose leadership the transaction took place.
  • Jamie Dimon — Chairman and CEO of JPMorgan Chase & Co., whose comment regarding competition in the financial sector was mistakenly included in the Bloomberg article about GSK.