GSK to purchase uncommon most cancers drug developer IDRx for as much as £1bn

GSK has agreed to buy US biopharmaceutical business IDRx in a deal worth up to $1.15billion (£1billion).

Under the agreement, GSK will pay $1billion upfront to acquire the Massachusetts-based firm, followed by up to $150million in ‘success-based’ milestone payments.

IDRx is developing a treatment for gastrointestinal stromal tumours (GIST), a rare cancer that develops in the digestive system and is diagnosed in 80,000 to 120,000 new patients every year.

Current treatments for GIST are ineffective, with 90 per cent of patients developing new mutations that typically cause a relapse.

However, GSK noted that IDRx’s experimental therapy – IDRX-42 – was showing signs of preventing tumours from growing.

The US Food and Drug Administration recently gave IDRX-42 fast-track designation for treating patients with GIST who had shown resistance to other drugs like Imatinib.

Takeover: GSK has agreed to buy American biopharmaceutical business IDRx

Tim Clackson, chief executive of IDRx, noted there had been ‘no major advances to the standard of care for almost 20 years’. 

He added: ‘Combining our experience to date with GSK’s expertise in GI cancers, global clinical development capability, and strong commercial presence in oncology will help to accelerate the development of this novel medicine for patients.’

Funded by serial biotech entrepreneurs Christoph Lengauer and Ben Auspitz, IDRx was valued at $430million at a funding round in August.

The company has received financial backing from private equity giant Blackstone, as well as venture capital firms RA Capital and Andreessen Horowitz.

GSK’s purchase of the group further expands its oncology portfolio, which has grown in recent years under chief executive Emma Walmsley amid investor pressure.

It acquired TESARO, developer of ovarian cancer drug Zejula, for £4billion in 2019 before buying California-based rare cancer specialist Sierra Oncology in a £1.5billion deal three years later.

But oncology medicines form a small share of GSK’s overall business, responsible for less than 5 per cent – $373million – of its $8billion revenues in the third quarter. 

During the period, the firm enjoyed $2.65billion in vaccine sales, $1.75billion in HIV-related treatment sales, and over $1.6billion in respiratory drug orders. 

Luke Miels, chief commercial officer of GSK, said the IDRx takeover ‘is consistent with our approach of acquiring assets that address validated targets and where there is clear unmet medical need, despite existing approved products.’

GSK shares were 0.8 per cent lower at 1,339p on Monday morning and have still fallen by around 15 per cent over the past year.