LONDON — Every big drugmaker is running from the same clock, the day a blockbuster loses its patent and the revenue that came with it falls away. GSK’s clock starts ticking in 2028, when its best-selling HIV medicine loses exclusivity. On Tuesday the British company answered it the way the industry usually does, by buying someone else’s pipeline.
GSK agreed to acquire Nuvalent, a US-listed cancer-drug developer, for $10.6 billion in cash, its largest acquisition in more than a decade. The price, about $124 a share, is a 40 percent premium to where Nuvalent traded the day before, and the market took it at face value, sending the stock up roughly 39 percent. The terms were laid out on Tuesday morning and detailed in a filing with US regulators.
What the money buys is two late-stage drugs and the bet that both win approval. Zidesamtinib and neladalkib are next-generation inhibitors aimed at the specific mutations that drive much of non-small-cell lung cancer, the ROS1 and ALK alterations, and both are under review at the Food and Drug Administration with decisions expected this year. GSK calls them potential best-in-class, the industry’s phrase for a drug it believes will outdo what is already on the shelf.
Best-in-class is a forecast, not a fact, and GSK is paying a forecast price. A 40 percent premium for a company whose lead products have not yet cleared their final regulatory hurdle is the kind of number that looks visionary if the approvals come and reckless if they slip. The agency can delay a decision, narrow a label, or ask for more data, and an inhibitor that looked best-in-class in a trial can look ordinary once rivals catch up.
GSK is not buying in a quiet market. Drugmakers are racing to refill pipelines before their own patent cliffs arrive, part of a broader run of takeovers that has swept across media giants chasing one another in hundred-billion-dollar deals and delivery and tech firms swallowing rivals whole. Cash is being spent to buy growth that the buyers can no longer generate quickly enough on their own.
Cancer is where much of that money is going. The hunt for the next oncology franchise has pulled in drugs designed for entirely different purposes, with researchers now even studying the cancer effects of weight-loss medicines, and it has made small, focused biotechs like Nuvalent the most prized targets on the board. A company with two promising molecules and nothing yet on sale can be worth more to a giant than to the public markets that priced it.
For GSK the logic is defensive as much as ambitious. The HIV business that has underwritten its earnings is approaching the edge, and lung cancer is a large and growing market the company has wanted a stronger position in. Buying Nuvalent does not replace the HIV revenue on its own, but it buys time and a foothold, and it tells investors the company has a plan for the gap rather than a hope.
What it does not buy is certainty. The deal still depends on a tender offer, on regulators clearing the merger, and above all on two drugs that have not yet been approved doing what their trials suggest they can. Until the FDA rules, GSK has spent $10.6 billion on a thesis. The market, for a day at least, decided to believe it.
