UPDATE: GSK buys cancer drug developer Nuvalent for $10.6 billion

GSK PLC on Tuesday said it has agreed to US-based cancer drug developer Nuvalent Inc for $10.6 billion.

The announcement confirmed a Financial Times report published early Tuesday.

The final $10.6 billion price tag is significantly higher than the Cambridge, Massachusetts-based company’s market capitalisation of roughly $6.99 billion as per its closing price of $88.49 per share on Monday in New York.

Per share, the offer values Nuvalent at $124, roughly 40% higher than Monday’s closing price. Nuvalent shares are up 16% over the past year.

GSK shares traded 3.1% lower at 1,853.50 pence on Tuesday morning in London, giving it a market cap of £75.33 billion. The stock is up 23% over the past year.

This marks the London-based pharmaceutical maker’s largest acquisition since 2014, when it bought Swiss peer Novartis AG’s vaccines business of $20 billion.

It will acquire Nuvalent through a tender offer for Nuvalent Class A and B shares at a price of $124 each, to be made within ten business days. After the tender offer closes, GSK plans to acquire the remaining shares of Nuvalent through a second-step merger according to Delaware state law, at the same price per share.

This gives the deal an aggregate equity value of $10.6 billion, or £8.0 billion, and net of cash acquired, GSK said it represents an aggregate investment of $9.4 billion, or £7.1 billion. It will record the transaction as a business combination on its balance sheet.

Under the terms of the deal, GSK will assume Nuvalent’s existing revenue-sharing arrangements of low single-digit royalties payable to Royalty Pharma and Deerfield.

The acquisition includes the cancer drug candidates, zidesamtinib, or NVL-520, and neladalkib, or NVL-655, both of which have breakthrough therapy and orphan drug designations from the US Food & Drug Administration. Regulatory decisions are expected by September 18 for the former and November 27 for the latter, with both drugs expected to launch in 2026.

The deal also includes NVL-330, which is in phase-one trials to treat non-small cell lung cancer.

GSK stressed that there is no change to its full-year guidance as a result of the deal, however, assuming the deal closes in the third quarter of 2026, GSK expects low single-digit percentage dilution to core EPS in 2026, 2027 and 2028.

Nuvalent is expected to contribute to revenue growth from 2027 and to be incremental to GSK’s sales target of more than £40 billion by 2031. GSK also sees the deal boosting core operating profit during the loss of exclusivity period for the drug dolutegravir, from 2028 to 2030. Nuvalent is expected to contribute to core operating profit in 2027 and core earnings per share in 2029.

GSK plans to fund the purchase from both new and existing debt facilities, alongside cash, but does not see this affecting its credit rating. It also backed its 2026 dividend target of 70p per share.

In April, GSK posted modest profit growth in its first quarter, aided by Specialty Medicines performance, and reaffirmed annual guidance. Pretax profit rose 1.7% to £2.14 billion for the three months ended March 31 from £2.12 billion the previous year.

Chief Executive Luke Miels commented on Tuesday: ‘Today’s acquisition is a multi-product deal, consistent with our approach to acquire assets that have clinically proven targets and meaningfully address an efficacy and/or tolerability gap. The two lead products are potential best-in-class assets that could launch this year if approved by the FDA and offer significant new treatment options to patients with two forms of non-small cell lung cancer.

‘The acquisition provides GSK with immediate new sales growth opportunities, improving profit contributions from 2027, and a platform in lung cancer for rapid expansion with Ris-Rez, our B7-H3 targeted ADC in phase III clinical development.’

Back in February, GSK acquired California-based allergy drug developer Rapt Therapeutics for $2.2 billion.

Separately in February, GSK announced that it would be cutting up to 350 research and development jobs across the US and UK as part of an ongoing overhaul of the division.

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