GlaxoSmithKline to Acquire Tesaro for $5.1b

GlaxoSmithKline plc (GSK), a large European-based pharmaceutical manufacturer is acquiring TESARO Inc., an oncology-focused biopharmaceutical company. The transaction accelerates GSK's commercial capability in oncology. TESARO's major marketed product is Zejula (niraparib), an oral, once-daily ribose polymerase (PARP) inhibitor approved for use in ovarian cancer. It works by blocking an enzyme that cancer cells use to repair damage in their DNA. In Q3 2018, Zejula generated $166m in revenue. Ovarian cancer is the fifth leading cause of cancer-related deaths in the US.There were ~22,000 women in the U.S. diagnosed with the disease in 2018 and a~14,000 disease-related deaths. Zejula is currently being investigated as a monotherapy and first-line treatment for ovarian cancer patients across all patient populations.

GSK has been streamlining its operations to focus on drug development that will accelerate growth, such as in oncology. Acquiring Tesaro reverses GSK's prior strategy of divesting oncology products in its $20b deal with Novartis. Deal value - ~$5.1b on sales of $223m (22.9x), with negative EBITDA of 469m.

Keywords: Healthcare Investment Banking, Healthcare M&A, Healthcare mergers