GlaxoSmithKline acquires cancer-killer Tesaro for $5.1 billion
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GlaxoSmithKline acquires cancer-killer Tesaro for $5.1 billion

The continuing repositioning of GlaxoSmithKline (GSK) under CEO Emma Walmsley, has continued with a new acquisition. Pharmaceutical giant GSK has been restructuring to focus on cancer treatments (amongst other things) over the last year, and its $5.1 billion purchase of Tesaro, a drug maker with a novel treatment for ovarian cancer, will further than move. Specifically, the acquisition will help to advance a refresh of GSK’s research and development (R&D) functionality, under chief scientific officer Hal Barron.

Investors reacted poorly to the news, though GSK’s share price is still up by 4% so far this year

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Source: Yahoo Finance

Other steps GSK has taken to refresh its R&D offering include a $300 million investment in consumer DNA sequencer 23andme, and a strategy to focus on developing treatments which act on the body’s immune system. The acquisition will add something else to the unit: capability in a type of cancer drugs called PARP inhibitors.

Tesaro makes a drug called Zejula, a PARP inhibitor that blocks an enzyme cells use to repair DNA. The enzyme in question is also used by certain cancers, allowing them to thrive, so blocking it effectively takes the self-repair function away from these aggressive diseases. Zejula is a treatment for ovarian cancer, and comes in pill form to be taken once per day.

Barron made the following comment over the acquisition in a press release: "Our strong belief is that PARP inhibitors are important medicines that have been underappreciated in terms of the impact they can have on cancer patients. We are optimistic that Zejula will demonstrate benefit in patients with ovarian cancer beyond those who are BRCA-positive as front-line treatment."

Disclosure
Dominion holds GlaxoSmithKline in its Global Trends Managed Fund.


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