Late-stage biopharmaceutical company Sierra Oncology (NASDAQ:SRRA) is up big today on news that GlaxoSmithKline (NYSE:GSK) will purchase the business. Indeed, SRRA stock is up a massive 38% so far today on the headline-grabbing acquisition news.
So, what do you need to know about Sierra lately?
Well, this morning UK-based Glaxo announced it will buy Sierra for $1.9 billion. This values the California-based Sierra at roughly $55 per share, a 39% premium from Sierra’s $39.52 closing price on Tuesday.
The move seemingly comes as a bullish indicator for biotech companies lately. Interestingly, Antares Pharma (NASDAQ:ATRS) was also acquired today by Halozyme Therapeutics (NASDAQ:HALO), sending ATRS stock up nearly 50% at the time of writing.
Sierra is perhaps best known for its Momelotinib therapy, made to treat myelofibrosis, a rare type of blood cancer. Indeed, some believe the treatment is a major justification behind Glaxo’s acquisition.
What else do you need to know about the latest big-name biotech deal?
SRRA Stock Soars on Acquisition News
The acquisition of Sierra reinforces Glaxo’s offerings of cancer treatment as the company attempts to transition out of its healthcare offerings.
Sierra purchased Momelotinib from Gilead Sciences (NASDAQ:GILD) in 2018 for $3 million. This past January, Sierra reported promising results from its Phase 3 study of the drug. As such, the treatment likely reaped a higher valuation for Sierra. Many assumed Sierra would file for U.S. Food and Drug Administration (FDA) approval sometime this quarter. Analysts estimate Momelotinib could pull in nearly $1 billion in sales revenue.
Sierra has missed its past several earnings estimates, through fiscal Q1 2021. However, this isn’t uncommon for largely experimental biotech companies, especially with many of its largest treatments still in testing.
Sierra investors are in good spirits today on today’s big jump.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.