GlaxoSmithKline (GSK) has signed a merger agreement to buy US-based biopharmaceutical company Tesaro for an aggregate consideration of around $5.1bn in a cash-based transaction.

Under the terms of the agreement, an indirect subsidiary of GSK will initiate a tender offer to acquire all issued and outstanding shares of Tesaro common stock for $75 per share.

Tesaro is primarily focused on the development of oncology therapies. Its lead marketed drug is a poly ADP ribose polymerase (PARP) inhibitor called Zejula (niraparib) indicated for the treatment of ovarian cancer.

Zejula holds approvals in the US and Europe for recurrent ovarian cancer in adults who have responded to platinum-based chemotherapy, irrespective of their BRCA mutation and biomarker status.

For the nine months ended 30 September 2018, Zejula recorded $166m in revenues as a second-line maintenance treatment for ovarian cancer.

The drug is currently being evaluated as a monotherapy and in different combinations for first line maintenance treatment of ovarian cancer with or without gBRCA mutations.

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“The acquisition of Tesaro will strengthen our pharmaceuticals business by accelerating the build of our oncology pipeline and commercial footprint.”

GSK expects the acquisition to bolster its pharmaceutical business by supporting the oncology pipeline and commercial capability.

GSK CEO Emma Walmsley said: “The 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.”

The British pharmaceutical giant added that PARP inhibitors posses the potential for use in different cancer types. Besides ovarian cancer, Zejula is being assessed for treating lung, breast and prostate cancers.

Apart from Zejula, Tesaro oncology pipeline comprises antibodies targeting PD-1, TIM-3 and LAG-3.

Tesaro CEO Lonnie Moulder said: “This 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.”

The acquisition, which is subject to satisfaction of customary closing conditions, is expected to close in the first quarter of next year.