GSK shares fall 8% after €4.5bn cancer drug deal

GSK shares fall 8% after €4.5bn cancer drug deal
The GSK plant in Sligo

British pharmaceutical giant GlaxoSmithKline (GSK), which employs 1,700 in Ireland, has agreed to buy US cancer specialist Tesaro for $5.1bn (€4.5bn), while also selling its Indian Horlicks business to Unilever for $3.8bn.

Shares in GSK fell almost 8% as investors said the Tesaro deal was overpriced.

GSK has lagged rivals in recent years in producing multibillion-dollar blockbusters and it largely sat out a spate of dealmaking by rival drugmakers under previous chief executive Andrew Witty.

GSK employs 1,700 across sites in Dungarvan, Cork, Sligo and Dublin. More than six billion Panadol tablets are made in Dungarvan annually, exporting to 70 countries around the world.

Its Cork site produces active ingredients for a range of medicines for diseases such as childhood cancer, depression, diabetes, HIV, Parkinson’s disease, and arthritis.

Sligo produces around 30 million skin medicines and products every year including Oilatum and Physiogel, exporting to over 65 countries.

The Dublin headquarters is home to its pharmaceuticals and consumer healthcare businesses.

The Tesaro purchase marks a major biotech investment by chief executive Emma Walmsley as she seeks to rebuild the group’s pharmaceuticals business.

Boston-based Tesaro has long been seen as a potential takeover target, with other suggested acquirers in the past including Switzerland’s Roche.

The definitive agreement to acquire Tesaro comes on the same day as GSK sold its India-focused Horlicks nutrition business to Unilever for $3.8bn, freeing up cash for pharmaceuticals investment.

Tesaro gives GSK a marketed product for ovarian cancer, Zejula, which belongs to the promising new class of medicines called poly ADP ribose polymerase (PARP) inhibitors.

GSK’s UK rival, AstraZeneca, sells the rival PARP drug Lynparza, while Clovis Oncology markets another called Rubraca.

PARP inhibitors work by blocking enzymes involved in repairing damaged DNA, thereby helping to kill cancer cells, and they are a growing focus for drug research, with potential for use beyond ovarian tumors in breast, lung and prostate cancers.

Ms Walmsley, who took over in April 2017, has made replenishing GSK’s medicines cabinet her top priority.

“This is an example of us executing on what we said we were going to do... to bring growth, pipeline, commercial capability and near-term catalysts… We still will be open to other potential bolt-ons in business development,” Ms Walmsley said.

Reuters and Irish Examiner staff

More on this topic

Developers of proposed Cork city student apartment complex begin discussions with An Bord PleanálaDevelopers of proposed Cork city student apartment complex begin discussions with An Bord Pleanála

Tech solutions company Horizon8 opens European office in CorkTech solutions company Horizon8 opens European office in Cork

Cork council paid private operator €1.7m for parking enforcement in one townCork council paid private operator €1.7m for parking enforcement in one town

Residents to hold 'Slow Walk' protest against speeding cars in BandonResidents to hold 'Slow Walk' protest against speeding cars in Bandon

More in this Section

Tech firm Horizon8 picks Cork as Europe HQTech firm Horizon8 picks Cork as Europe HQ

Abbey eyes more Irish work as profits fallAbbey eyes more Irish work as profits fall

Providence shares see bounce on Tony O’Reilly exitProvidence shares see bounce on Tony O’Reilly exit

Legislation to test self-driving cars on Irish roads approvedLegislation to test self-driving cars on Irish roads approved


Lifestyle

This Christmas remember that there is no such thing as cheap food.Buy local: Use your LOAF

As we wait, eager and giddy, a collective shudder of agitated ardor ripples through the theatre, like a Late, Late Toyshow audience when they KNOW Ryan’s going to give them another €150 voucher. Suddenly, a voice booms from the stage. Everyone erupts, whooping and cheering. And that was just for the safety announcement.Everyman's outstanding Jack and the Beanstalk ticks all panto boxes

Every band needs a Bez. In fact, there’s a case to be made that every workplace in the country could do with the Happy Mondays’ vibes man. Somebody to jump up with a pair of maracas and shake up the energy when things begin to flag.Happy Mondays create cheery Tuesday in Cork gig

More From The Irish Examiner