British drugmaker GSK said Tuesday it will acquire Boston-based biotechnology company Nuvalent for $10.6 billion, adding two late-stage experimental cancer drugs to its pipeline. The all-cash deal ranks among the largest in the London-based company’s history and marks the most significant transaction since Luke Miels took over as chief executive in January.
The acquisition centers on two next-generation treatments for non-small cell lung cancer: zidesamtinib and neladalkib. Both drugs target specific mutations that drive the disease and are designed to offer longer effective treatment with improved tolerability compared with existing therapies. The U.S. Food and Drug Administration is reviewing both drugs, with decisions expected in September and November. If approved, the drugs could launch later this year and generate several billion dollars in annual revenue each, according to the company.
The mutations the drugs target affect non-smoking adults aged 40 to 50, predominantly women, GSK said.
Miels, who previously served as GSK’s chief commercial officer, said the acquisition provides a platform for rapid expansion in lung cancer and aligns with the company’s strategy of buying assets with clinically proven targets. “The two lead products are potential best-in-class assets that could launch this year if approved by the FDA and offer significant new treatment options to patients with two forms of non-small cell lung cancer,” Miels said in a statement.
The deal includes a later-stage product called Ris-Rez that GSK hopes could treat multiple forms of cancer. The company said Ris-Rez supports its target of more than £40 billion in annual sales by 2031.
Miels has struck a string of smaller bolt-on acquisitions since taking over from Emma Walmsley, who began GSK’s push into oncology in 2017. The Nuvalent acquisition is GSK’s largest ever outright purchase, though the company was involved in a larger 2014 asset swap with Novartis valued at about $21 billion. In that transaction, GSK bought Novartis’s vaccines division for $5.25 billion and sold its own cancer portfolio to Novartis for $16 billion under then-CEO Andrew Witty.
In January, GSK acquired the California-based biotech RAPT, which is developing a drug to protect against severe food allergies.
The deal comes as the Federal Reserve’s benchmark interest rate stands at 3.63%, making financing for large corporate acquisitions relatively affordable. GSK did not disclose how it intends to fund the purchase.