We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
GSK to Strengthen Oncology Pipeline With $10.6B Nuvalent Buyout
Read MoreHide Full Article
Key Takeaways
GSK agreed to acquire Nuvalent for $124 per share in a deal valued at about $10.6 billion.
GSK will add three NSCLC pipeline assets, including two candidates under FDA review.
GSK expects the deal to aid revenue growth from 2027 and support long-term sales goals.
GSK plc (GSK - Free Report) announced that it has agreed to acquire clinical-stage biotech Nuvalent (NUVL - Free Report) . Per the terms, the British drugmaker will acquire all outstanding shares of NUVL for $124 per share, valuing the deal at around $10.6 billion (~£8 billion).
Following the acquisition, GSK will add three pipeline candidates that are in clinical development. These include two candidates — ROS1 inhibitor zidesamtinib and ALK inhibitor neladalkib — that are currently being reviewed by the FDA as potential treatments for non-small cell lung cancer (NSCLC). Regulatory decisions on these filings are expected before this year’s end. Nuvalent's third pipeline asset, NVL-330, is a HER2 inhibitor currently being evaluated in an early-stage study for NSCLC. GSK will also acquire the preclinical portfolio, which consists of multiple programs.
GSK will also assume Nuvalent's existing revenue-sharing arrangements, including low-single-digit royalties payable to Royalty Pharma (RPRX - Free Report) and Deerfield
The transaction, expected to be completed in the third quarter, is subject to customary closing conditions and clearance from regulatory authorities. GSK expects to fund the deal using a combination of cash and debt.
GSK & NUVL Stock Performance
Post the announcement, shares of GSK were down 1% in pre-market trading today, while those of Nuvalent have jumped nearly 39%.
Year to date, GSK’s stock is up more than 3%, while Nuvalent is down 12%. In comparison, the industry has lost nearly 2% during this time frame.
Image Source: Zacks Investment Research
What Drives GSK’s Interest in Nuvalent?
The acquisition strengthens GSK's growing oncology business by adding a portfolio of targeted therapies for genetically defined forms of NSCLC. The company believes Nuvalent's assets will enhance its precision oncology capabilities and expand its presence in the large and rapidly evolving NSCLC space.
GSK also sees the deal as complementary to risvutatug rezetecan, its experimental B7-H3-targeted antibody-drug conjugate (ADC) candidate being developed in a late-stage study for extensive-stage small-cell lung cancer. Management said the acquisition provides the company with a platform for expansion into the lung cancer space while creating additional growth opportunities within its oncology portfolio.
The transaction is expected to contribute to GSK's revenue growth beginning in 2027 and support its long-term objective of generating more than £40 billion in annual sales by 2031. Management expects the acquisition to be accretive to core operating profit from 2027 and to core EPS from 2029, inclusive of anticipated synergies.
Importantly, GSK said the deal is expected to strengthen core operating profit through the anticipated loss-of-exclusivity period for dolutegravir products between 2028 and 2030. This suggests that the company views Nuvalent's pipeline as a potential growth driver that could help offset future pressure on its HIV franchise.
Although GSK expects the transaction to result in low single-digit dilution to core EPS from 2026 through 2028, it maintained its previously issued 2026 guidance. The company expects 7-9% growth in core operating profit and core EPS, indicating that the near-term impact is not expected to materially affect its earnings outlook.
The Nuvalent acquisition marks GSK's third deal in 2026. Earlier this year, the company expanded its respiratory, immunology and inflammation pipeline through the acquisitions of clinical-stage company RAPT Therapeutics and private biotech 35Pharma. These transactions underscore GSK's continued focus on strengthening its pipeline through targeted acquisitions of clinical-stage biotechnology companies.
View the Zacks #1 Rank List
Image: Bigstock
GSK to Strengthen Oncology Pipeline With $10.6B Nuvalent Buyout
Key Takeaways
GSK plc (GSK - Free Report) announced that it has agreed to acquire clinical-stage biotech Nuvalent (NUVL - Free Report) . Per the terms, the British drugmaker will acquire all outstanding shares of NUVL for $124 per share, valuing the deal at around $10.6 billion (~£8 billion).
Following the acquisition, GSK will add three pipeline candidates that are in clinical development. These include two candidates — ROS1 inhibitor zidesamtinib and ALK inhibitor neladalkib — that are currently being reviewed by the FDA as potential treatments for non-small cell lung cancer (NSCLC). Regulatory decisions on these filings are expected before this year’s end. Nuvalent's third pipeline asset, NVL-330, is a HER2 inhibitor currently being evaluated in an early-stage study for NSCLC. GSK will also acquire the preclinical portfolio, which consists of multiple programs.
GSK will also assume Nuvalent's existing revenue-sharing arrangements, including low-single-digit royalties payable to Royalty Pharma (RPRX - Free Report) and Deerfield
The transaction, expected to be completed in the third quarter, is subject to customary closing conditions and clearance from regulatory authorities. GSK expects to fund the deal using a combination of cash and debt.
GSK & NUVL Stock Performance
Post the announcement, shares of GSK were down 1% in pre-market trading today, while those of Nuvalent have jumped nearly 39%.
Year to date, GSK’s stock is up more than 3%, while Nuvalent is down 12%. In comparison, the industry has lost nearly 2% during this time frame.
Image Source: Zacks Investment Research
What Drives GSK’s Interest in Nuvalent?
The acquisition strengthens GSK's growing oncology business by adding a portfolio of targeted therapies for genetically defined forms of NSCLC. The company believes Nuvalent's assets will enhance its precision oncology capabilities and expand its presence in the large and rapidly evolving NSCLC space.
GSK also sees the deal as complementary to risvutatug rezetecan, its experimental B7-H3-targeted antibody-drug conjugate (ADC) candidate being developed in a late-stage study for extensive-stage small-cell lung cancer. Management said the acquisition provides the company with a platform for expansion into the lung cancer space while creating additional growth opportunities within its oncology portfolio.
The transaction is expected to contribute to GSK's revenue growth beginning in 2027 and support its long-term objective of generating more than £40 billion in annual sales by 2031. Management expects the acquisition to be accretive to core operating profit from 2027 and to core EPS from 2029, inclusive of anticipated synergies.
Importantly, GSK said the deal is expected to strengthen core operating profit through the anticipated loss-of-exclusivity period for dolutegravir products between 2028 and 2030. This suggests that the company views Nuvalent's pipeline as a potential growth driver that could help offset future pressure on its HIV franchise.
Although GSK expects the transaction to result in low single-digit dilution to core EPS from 2026 through 2028, it maintained its previously issued 2026 guidance. The company expects 7-9% growth in core operating profit and core EPS, indicating that the near-term impact is not expected to materially affect its earnings outlook.
The Nuvalent acquisition marks GSK's third deal in 2026. Earlier this year, the company expanded its respiratory, immunology and inflammation pipeline through the acquisitions of clinical-stage company RAPT Therapeutics and private biotech 35Pharma. These transactions underscore GSK's continued focus on strengthening its pipeline through targeted acquisitions of clinical-stage biotechnology companies.
GSK PLC Sponsored ADR Price
GSK PLC Sponsored ADR price | GSK PLC Sponsored ADR Quote
GSK’s Zacks Rank
GSK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.