GSK launches $10.6bn bid for Nuvalent; shares fall

GlaxoSmithKline launched a $10.6 billion cash tender offer for US cancer drug developer Nuvalent at $124 per share on Tuesday, about a 40% premium to Nuvalent’s previous close. The headline value is $10.6 billion; GSK estimates its net investment will be roughly $9.4 billion after accounting for Nuvalent’s cash on hand.

The acquisition gives GSK three lung cancer candidates. Two are late‑stage therapies under review by the US Food and Drug Administration with decisions expected later this year, while a third is at an earlier stage of development. GSK expects the assets to begin contributing to revenue growth and to strengthen core operating profit from next year. The company also expects the portfolio to help offset patent expirations for the HIV medicine dolutegravir between 2028 and 2030. The company confirmed it will not alter its dividend policy as a result of the deal.

Market reaction was mixed. GSK shares fell about 3% and were among the weakest on the FTSE 100 after the announcement. Nuvalent’s stock rose nearly 38% in US premarket trading, reflecting the takeover premium.

Analysts pointed to the price and regulatory risk. Russ Mould of AJ Bell warned investors appear wary of the size of the premium and the reliance on regulatory approvals. Victoria Scholar of Interactive Investor noted the acquisition is larger than most recent GSK purchases and carries execution risks tied to bringing multiple products to market.

The transaction continues GSK’s effort to rebuild an oncology business it largely exited in 2015 through an asset swap with Novartis. Since then GSK has expanded its cancer portfolio through acquisitions and licensing agreements, including deals for Tesaro, Sierra Oncology and IDRx. Unlike some earlier purchases that focused on single products, the Nuvalent deal brings several pipeline candidates in one transaction.

Chief Executive Luke Miels described GSK’s strategy as a ‘brick-by-brick building approach’ and added the deal aligns with the company’s focus on validated science that addresses gaps in current treatments. Company officials indicated they will work to integrate Nuvalent while advancing regulatory reviews and that the acquisition will preserve financial flexibility for future opportunities.