Sareum Holdings - GSK’s Sierra acquisition, read-across for Sareum
GlaxoSmithKline (GSK) has announced the acquisition of Sierra Oncology, Sareum’s licensing partner for its CHK1 asset SRA737 (held in partnership with CRT Pioneer Fund) targeting solid tumours. The deal values Sierra at $55/share (a 39% premium to the closing price on 12 April) for a total consideration of $1.9bn. As a reminder, SRA737 was in-licensed by Sierra in 2016 and Sareum holds a 27.5% stake in the proceeds of the licence agreement. Development work on SRA737 had been deprioritised (due to funding constraints) until recently, when Sierra indicated a revival in development work on a potential combination therapy. Sareum’s share price has responded favourably following news on the acquisition, suggesting that the market is expecting progress on the asset to accelerate given the significantly heftier resources at GSK’s disposal. We note that first patient dosing in any studies involving SRA737 will trigger a milestone payment of $2m (translating to $0.55m to Sareum).Sareum Holdings is a holding company. Through its subsidiary, Co. is engaged as a specialist drug discovery and development company delivering targeted small molecule therapeutics, focusing on cancer and autoimmune disease, and licensing them to international pharmaceutical and biotechnology companies at the preclinical or early clinical trials stage. Co.'s drug development pipeline includes: Chk1 (SRA737), which targets genetically defined solid cancers; TYK2, which targets autoimmune diseases and cancer; and Aurora+FLT3, which targets Acute Myeloid Leukemia and other blood cancers.
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