GSK to buy oncology-focused biopharmaceutical firm Tesaro for $5.1bn

Based in Waltham of Massachusetts, Tesaro is a commercial-stage firm engaged in the development of advanced therapies to treat cancer.

As per the terms of the deal, GSK’s indirect subsidiary will begin a tender offer within the next 10 business days to purchase all of the issued and outstanding shares of Tesaro common stock for a price of $75 per share in cash.

GSK CEO Emma Walmsley said: “The acquisition of Tesaro will strengthen our pharmaceuticals business by accelerating the build of our oncology pipeline and commercial footprint, along with providing access to new scientific capabilities.”

Tesaro produces Zejula (niraparib), which is an oral poly ADP ribose polymerase (PARP) inhibitor secured approval to treat ovarian cancer.

PARP is a family of proteins engaged in multiple functions in a cell, including DNA repair, gene expression, cell cycle control, intracellular trafficking and energy metabolism.

PARP proteins play crucial role in single strand break repair via the base excision repair pathway.

In the US and Europe, Zejula was approved to treat adult patients with recurrent ovarian cancer who are in response to platinum-based chemotherapy.

At present, Zejula is also being assessed for use as a possible treatment in lung, breast and prostate cancer, both as a monotherapy and in combination with other medicines, including with Tesaro’s own anti-PD-1 antibody.

Tesaro’s product pipeline includes various oncology assets, including antibodies directed against PD-1, TIM-3 and LAG-3 targets.

Subject to satisfaction of customary closing conditions, the deal is expected to be completed in the first quarter of 2019.

Tesaro CEO Lonnie Moulder said: “This transaction marks the beginning of a new global partnership that will accelerate our oncology business and allow our mission of delivering transformative products to individuals living with cancer to endure.

“Our board and management team are very pleased to announce this transaction, and we are grateful to the management team at GSK for their tremendous vision and the opportunity to preserve and build upon the impact we have had in the cancer community to date.”

PJT Partners and Bank of America Merrill Lynch are advising the British drugmaker on the transaction, while Bank of America Merrill Lynch is also acting as corporate broker. Shearman & Sterling is providing the legal advice with Slaughter and May advising on the acquisition facility.

For Tesaro, the financial advice is being provided by Centerview Partners along with Citi, which is serving as the lead financial advisor. Ropes & Gray and Hogan Lovells are providing the legal advice.