GSK PLC (LSE:GSK, NYSE:GSK) shares fell 3% after it agreed to acquire US biotechnology company Nuvalent (NASDAQ:NUVL) for $10.6 billion (£8.0 billion), adding immediate new revenues and a trio of lung cancer drugs in advanced development.
The FTSE 100 pharmaceuticals group said the deal would contribute to revenue growth from 2027 and be accretive to core operating profit in 2027 and core earnings per share in 2029, including synergies and reprioritisation.
The company maintained its 2026 guidance and said it remained committed to its expected 70p dividend for the year.
GSK will pay $124 a share in cash for Nuvalent, representing a 40% premium to the Boston-based outfit's last closing price. Net of cash acquired, GSK's investment is expected to be about $9.4 billion (£7.1 billion).
The transaction will be funded through a mix of cash and debt.
Luke Miels, chief executive of GSK, said: "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."
He added: "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."
GSK highlighted the additions of zidesamtinib and neladalkib, two late-stage treatments for non-small cell lung cancer that are currently under review by the US Food & Drug Administration, with target decision dates in September and November.
Both drugs have received FDA Breakthrough Therapy and Orphan Drug designations and, subject to approval, are expected to launch this year. GSK said the medicines have multi-blockbuster potential.
The acquisition also includes NVL-330, a HER2 inhibitor in phase I trials, together with Nuvalent's wider preclinical portfolio.
GSK shares fell 3.5% to 1,845p in Tuesday morning trading.
Following speculative reports of a deal overnight, UBS analyst Matthew Weston said he would view a Nuvalent acquisition "as broadly in line with GSK's oncology strategy of targeting smaller subsets of patients with differentiated products but where the mode of action is already validated.
"We would expect investors may be surprised at the size of a potential acquisition >$9bn given management's previous commentary that $2-4 billion is their preferred deal size."
Offsetting this deal size, he said, is the fact that Nuvalent has two late-stage assets with validated pivotal data "which have the potential to contribute to sales and earnings trajectory pre-2030".
UBS's US biotech analysts forecast peak sales expectations for lead asset zidesamtinib in ROS-1 mutant lung cancer of $1.7 billion, versus the wider Wall Street consensus at $700 million.
** UPDATE: Adds share price and analyst comments **
