{"id":71151,"date":"2018-12-03T01:00:00","date_gmt":"2018-12-07T04:52:29","guid":{"rendered":"http:\/\/www.05921.net\/index.php\/2018\/12\/07\/307f914498\/"},"modified":"2018-12-07T12:52:29","modified_gmt":"2018-12-07T04:52:29","slug":"307f914498","status":"publish","type":"post","link":"https:\/\/www.05921.net\/index.php\/71151\/","title":{"rendered":"GSK reaches agreement to acquire TESARO"},"content":{"rendered":"
\n

GlaxoSmithKline plc (LSE\/NYSE: GSK) and TESARO Inc (NASDAQ: TSRO) today announced that the Companies have entered into a definitive agreement pursuant to which GSK will acquire TESARO, an oncology-focused company based in Waltham, Massachusetts, for an aggregate cash consideration of approximately $5.1 billion (\u00a34.0 billion). The proposed transaction will significantly strengthen GSK\u2019s pharmaceutical business, accelerating the build of GSK\u2019s pipeline and commercial capability in oncology.<\/span><\/p>\n

TESARO is a commercial-stage biopharmaceutical company, with a major marketed product, Zejula (niraparib), an oral poly ADP ribose polymerase (PARP) inhibitor currently approved for use in ovarian cancer. PARP inhibitors are transforming the treatment of ovarian cancer, notably demonstrating marked clinical benefit in patients with and without germline mutations in a BRCA gene (gBRCA). Zejula is currently approved in the US and Europe as a treatment for adult patients with recurrent ovarian cancer who are in response to platinum-based chemotherapy, regardless of BRCA mutation or biomarker status.<\/span><\/p>\n

Clinical trials to assess the use of Zejula in \u201call-comers\u201d patient populations, as a monotherapy and in combinations, for the significantly larger opportunity of first line maintenance treatment of ovarian cancer are also underway. These ongoing trials are evaluating the potential benefit of Zejula in patients who carry gBRCA mutations as well as the larger population of patients without gBRCA mutations whose tumours are HRD-positive and HRD-negative. Results from the first of these studies, PRIMA, are expected to be available in the second half of 2019.<\/span><\/p>\n

GSK also believes PARP inhibitors offer significant opportunities for use in the treatment of multiple cancer types. In addition to ovarian cancer, Zejula is currently being investigated for use as a possible treatment in lung, breast and prostate cancer, both as a monotherapy and in combination with other medicines, including with TESARO\u2019s own anti-PD-1 antibody (dostarlimab, formerly known as TSR-042).<\/span><\/p>\n

In addition to Zejula, TESARO has several oncology assets in its pipeline including antibodies directed against PD-1, TIM-3 and LAG-3 targets.<\/span><\/p>\n

Emma Walmsley, Chief Executive Officer, GSK, said:<\/span> \u201cThe acquisition of TESARO will strengthen our pharmaceuticals business by accelerating the build of our oncology pipeline and commercial footprint, along with providing access to new scientific capabilities. This combination will support our aim to deliver long-term sustainable growth and is consistent with our capital allocation priorities. We look forward to working with TESARO\u2019s talented team to bring valuable new medicines to patients.\u201d<\/span><\/p>\n

Hal Barron, Chief Scientific Officer <\/span>and President, R&D, GSK, said:<\/span> \u201cOur strong belief is that PARP inhibitors are important medicines that have been under appreciated in terms of the impact they can have on cancer patients. We are optimistic that Zejula will demonstrate benefit in patients with ovarian cancer beyond those who are BRCA-positive as front-line treatment. We are also very excited that through this transaction, we will have the opportunity to work with an outstanding Boston-based oncology group with deep clinical development expertise and together we will explore Zejula\u2019s efficacy beyond ovarian cancer into multiple tumour types to help many more patients.\u201d

Lonnie Moulder, Chief Executive Officer, TESARO, said:<\/span> \u201cThis transaction marks the beginning of a new global partnership that will accelerate our oncology business and allow our mission of delivering transformative products to individuals living with cancer to endure. Our Board and Management team are very pleased to announce this transaction, and we are grateful to the management team at GSK for their tremendous vision and the opportunity to preserve and build upon the impact we have had in the cancer community to date.\u201d<\/span><\/p>\n

Mary Lynne Hedley, President <\/span>and Chief Operating Officer, TESARO, said:<\/span> \u201cThis partnership marks an evolution in the way we live out the TESARO mission and will allow us to more rapidly deliver on our commitment to patients. I am excited to be partnering with our new colleagues at GSK as together we advance innovative scientific and drug development strategies that ultimately enable us to provide more time for more patients.\u201d<\/span><\/p>\n

Financial highlights<\/span>
The acquisition price of $75 per share in cash represents a 110% premium to TESARO\u2019s 30 day Volume Weighted Average Price of $35.67 and an aggregate consideration of approximately $5.1 billion (\u00a34.0 billion) including the assumption of TESARO\u2019s net debt.<\/span><\/p>\n

Zejula\u2019s revenues in its current approved indication as second-line maintenance treatment for ovarian cancer were $166 million for the 9 months ended 30 September 2018.<\/span><\/p>\n

GSK expects the acquisition of TESARO and associated R&D and commercial investments will impact Adjusted EPS for the first two years by mid to high single digit percentages, reducing thereafter with the acquisition expected to start to be accretive to Adjusted EPS by 2022.<\/span><\/p>\n

GSK\u2019s guidance for full-year 2018 Adjusted EPS growth remains unchanged at 8 to 10% at CER. GSK continues to expect to deliver on its previously published Group Outlooks to 2020, but following the acquisition of TESARO now expects Adjusted EPS growth at CER for the period 2016-2020 to be at the bottom end of the mid to high single digit percentage CAGR range.<\/span><\/p>\n

Guidance and Group Outlooks are given on the bases set out on pages 37 and 38 of GSK\u2019s Q3 2018 results, including definitions of CER growth and Adjusted results.<\/span><\/p>\n

GSK confirms no change to its current dividend policy and continues to expect to pay 80p in dividends for 2018.<\/span><\/p>\n

GSK expects to fund the acquisition from cash resources and drawing under a new acquisition facility.<\/span><\/p>\n

Structure and Terms of the Transaction<\/span> 
Under the terms of the merger agreement between GSK and TESARO, unanimously approved by TESARO\u2019s Board of Directors, an indirect subsidiary of GSK will commence a tender offer within the next 10 business days to acquire all of the issued and outstanding shares of TESARO common stock for a price of $75 per share in cash upon completion of the offer. The transaction is expected to complete in the first quarter of 2019, subject to satisfaction of customary closing conditions, including the tender by TESARO stockholders of at least one share more than 50% of the issued and outstanding shares of TESARO and required regulatory approvals, including clearance by the US Federal Trade Commission. Following closing of the tender offer, GSK will acquire any shares of TESARO that are not tendered in the tender offer through a second-step merger under Delaware law at the tender offer price.<\/span><\/p>\n

The value of the gross assets of TESARO to be acquired (as at 30 September 2018) is $711 million (\u00a3555 million at the rate of \u00a31 = $1.28, being the 30 November spot rate). The net losses of the business were $466 million for the 9 months ended 30 September 2018 (\u00a3345 million, at the rate of \u00a31 = $1.35, being the average rate for the 9 months ended 30 September 2018).<\/span><\/p>\n

GSK is in discussions with several key executives of TESARO to ensure their continued employment with the company.<\/span><\/p>\n

Additional information and where to find it<\/span>
This press announcement is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer or a recommendation to sell securities, nor is it a substitute for the tender offer materials that GSK and its indirect subsidiary, Adriatic Acquisition Corporation, will file with the Securities and Exchange Commission (the \u201cSEC\u201d). The tender offer for the outstanding shares of TESARO\u2019s common stock described in this press announcement has not commenced. At the time the tender offer is commenced, GSK and Adriatic Acquisition Corporation will file, or will cause to be filed, a Schedule TO Tender Offer Statement with the SEC, and, thereafter, TESARO will file a Schedule 14D-9 Solicitation\/Recommendation Statement with the SEC, in each case with respect to the tender offer. The Schedule TO Tender Offer Statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the Schedule 14D-9 Solicitation\/Recommendation Statement will contain important information that should be read carefully before any decision is made with respect to the tender offer.<\/span> Those materials (once they become available) will be made available to TESARO\u2019s stockholders at no expense to them by the information agent for the tender offer, which will be announced. In addition, those materials and all other documents filed by or caused to be filed by TESARO or GSK with the SEC will be available at no charge on the SEC\u2019s website at www.sec.gov . In addition to the Schedule 14D-9 Solicitation\/Recommendation Statement and Schedule TO Offer Statement (once each becomes available), TESARO and GSK file or furnish, as applicable, annual, quarterly and current reports and other information with the SEC. You may read and copy any reports or other information filed by TESARO at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-0330 for further information on the public reference room. TESARO\u2019s and GSK\u2019s filings with the SEC are also available to the public from commercial document-retrieval services and at the SEC\u2019s website at <\/span>www.sec.gov.<\/span><\/p>\n

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596\/2014. The person responsible for arranging the release of this announcement on behalf of GSK is V.A. Whyte, Company Secretary.<\/span><\/p>\n

Analyst conference call details<\/span> 
14:00 UK \/ 09:00 EST Monday 3 December<\/span><\/p>\n

UK Direct: 01296 480 100
UK freephone: 0800 783 0906<\/span><\/p>\n

US Direct: +1 718 354 1175
US freephone: + 1866 804 8688<\/span><\/p>\n

Passcode: 177 245 38<\/span><\/p>\n

Rest of world dial in numbers:
<\/span>http:\/\/www.btconferencing.com\/globalaccess\/?bid=54_attended<\/span><\/p>\n

TESARO portfolio and pipeline<\/span>
Zejula is an orally active and potent poly ADP-ribose polymerase (PARP) inhibitor. PARP is a family of proteins involved in many functions in a cell, including DNA repair, gene expression, cell cycle control, intracellular trafficking and energy metabolism. PARP proteins play key roles in single strand break repair through the base excision repair pathway. PARP inhibitors have shown activity as a monotherapy against tumours with existing DNA repair defects, such as BRCA1 and BRCA2, and as a combination therapy when administered together with anti- cancer agents that induce DNA damage or activate the immune system.<\/span><\/p>\n

TESARO\u2019s development pipeline also has a number of novel oncology candidates that modulate the function of the immune system via different mechanisms. By blocking the interaction of PD-1, TIM-3 and LAG-3 with their respective ligands, antibodies to these targets aim to restore immune anti-cancer function in patients across a variety of tumour types.<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

Compound<\/span><\/p>\n<\/td>\n

\n

Indication<\/span><\/p>\n<\/td>\n

\n

Phase<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Niraparib<\/span><\/p>\n<\/td>\n

\n

Ovarian cancer maintenance (PRIMA)<\/span><\/p>\n<\/td>\n

\n

Phase 3<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Niraparib + dostarlimab (anti-PD-1 mAb)<\/span><\/p>\n<\/td>\n

\n

First-line ovarian cancer treatment (FIRST)<\/span><\/p>\n<\/td>\n

\n

Phase 3<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Niraparib + anti-PD-1 mAb<\/span><\/p>\n<\/td>\n

\n

Advanced NSCLC, squamous cell carcinoma of the lung<\/span><\/p>\n<\/td>\n

\n

Phase 2<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Niraparib + bevacizumab<\/span><\/p>\n<\/td>\n

\n

First-line ovarian cancer maintenance (OVARIO)<\/span><\/p>\n<\/td>\n

\n

Phase 2<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Niraparib + bevacizumab<\/span><\/p>\n<\/td>\n


<\/td>\n		\n

Phase 2<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Niraparib + pembrolizumab<\/span><\/p>\n<\/td>\n

\n

Triple negative breast or ovarian cancer (TOPACIO)<\/span><\/p>\n<\/td>\n

\n

Phase 2<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Dostarlimab (anti-PD-1 mAb)<\/span><\/p>\n<\/td>\n

\n

MSI-H tumours including metastatic endometrial cancer (GARNET)<\/span><\/p>\n<\/td>\n

\n

Phase 1<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Niraparib + chemotherapy<\/span><\/p>\n<\/td>\n


<\/td>\n		\n

Phase 1<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Dostarlimab (anti-PD-1 mAb)<\/span><\/p>\n<\/td>\n

\n

Various tumour types<\/span><\/p>\n<\/td>\n

\n

Phase 1<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Dostarlimab +\/- bevacizumab + niraparib or carboplatin-paclitaxel<\/span><\/p>\n<\/td>\n

\n

Advanced or metastatic cancer<\/span><\/p>\n<\/td>\n

\n

Phase 1<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

TSR-022 (anti-TIM-3 mAb)<\/span><\/p>\n<\/td>\n

\n

Various tumour types (AMBER)<\/span><\/p>\n<\/td>\n

\n

Phase 1<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

TSR-033 (anti-LAG-3 mAb           <\/span><\/p>\n<\/td>\n

\n

Various tumour types (CITRINO)<\/span><\/p>\n<\/td>\n

\n

Phase 1<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Anti-LAG-3\/PD-1 bispecific antibody<\/span><\/p>\n<\/td>\n

\n

Various tumour types<\/span><\/p>\n<\/td>\n

\n

Discovery<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Undisclosed small molecule and antibody I-O candidates<\/span><\/p>\n<\/td>\n

\n

Various tumour types<\/span><\/p>\n<\/td>\n

\n

Discovery<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Advisors<\/span>
GSK is being advised by PJT Partners and additionally by Bank of America Merrill Lynch, who is also acting as corporate broker. Legal advice is being provided by Shearman & Sterling LLP, with Slaughter and May advising on the acquisition facility.<\/span><\/p>\n

Citi is serving as TESARO\u2019s lead financial advisor, with Centerview Partners also providing financial advice. Legal advice is being provided by Ropes & Gray LLP, and Hogan Lovells.<\/span><\/p>\n


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