Glaxosmithkline to pay up to $4.2 billion for access to Merck’s oncology division
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Glaxosmithkline to pay up to $4.2 billion for access to Merck’s oncology division

Glaxosmithkline (GSK), the pharmaceutical giant behind some of the world’s most successful drug treatments, will pay German drugmaker Merck KGaA as much as $4.2 billion to access its potentially ground-breaking immune-oncology treatment. According to GSK, this treatment could be the catalyst in delivering “the next wave” of cancer treatments to the public. This collaboration marks the latest in a series of moves by CEO Emma Walmsley to put GSK in the market-leading position when it comes to oncology.

Glaxosmithkline’s share price has appreciated by 3% so far in 2019

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Source: Yahoo Finance

Cancer treatments are the hottest property in pharmaceuticals at the moment, and companies including Roche Holdings, Novartis, Bristol-Meyers Squibb and more are expecting to see sales rise over the next few years. By 2022, oncology treatments are expected to be worth $160 billion – a 60% rise from 2017, according to Bloomberg Intelligence. Immune-oncology therapies – a type of treatment that uses the patients’ own immune system to battle tumours – is a particularly promising avenue.

GSK is hoping that the partnership will give it access to a range of cancer-killing drugs that go beyond the current wave (PD-1 inhibitors) and put it in a prime position to innovate more effective solutions. Speaking about what GSK will access as part of this deal, Axel Hoos, the company’s head of oncology research and development, said: “We need to take risks to go beyond PD-1, and we think we’re taking a pretty smart risk with this mechanism. This gives us access to a cutting-edge drug that could potentially improve on what that class is already delivering.”

Disclosure

Dominion holds GlaxoSmithKline in its Global Trends Managed Fund.


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