Danish healthcare company Pharmacosmos will acquire Durham-based cancer drug developer G1 Therapeutics in a deal worth about $405 million.
G1’s stock price soared more than 66% in early morning trading Wednesday, nearing its 52-week high of $7.09.
The U.S subsidiary, Pharmacosmos Therapeutics, will acquire all outstanding shares of G1 for $7.15 per share in cash. It’s a 68% premium to G1’s closing share price on Tuesday, and a 133% premium to the 30-day average price. The deal is expected to close late this quarter, according to a release.
Formed in 2008, G1 was spun out of research at UNC Chapel Hill’s Lineberger Comprehensive Cancer Center. Wilmington investor Fred Eshelman’s venture firm, Eshelman Ventures, is G1’s largest owner with a 9% stake, while AstraZeneca-owned Medmmune Ventures owns 5.7%, according to the company proxy.
The company became publicly traded in 2017, opening at $15 and trading for more than $60 in 2018. But it has never posted a net profit. In June, G1’s clinical trial for a drug given to breast cancer patients before beginning chemotherapy did not show significant results.
G1’s Cosela decreases the incidence of chemotherapy-induced myelosuppression, a condition in which bone marrow activity is decreased, resulting in fewer red and white blood cells and platelets. This condition can occur in patients receiving treatment for small cell lung cancer.
Pharmacosmos and G1 Therapeutics will aim to “grow and accelerate the availability of Cosela for all appropriate patients,” according to a release. Pharmacosmos brings “expertise in commercializing hematology and supportive care products” and “the combined company will be able to optimize the commercial reach to oncologists and expand the availability of Cosela among patients.”
“G1 and Pharmacosmos have a shared commitment to people living with cancer; the transaction announced today will enable a more rapid uptake of Cosela into the (Extensive Stage Small Cell Lung Cancer) market to maximize availability for patients who need this important drug,” says G1 Therapeutics CEO Jack Bailey. “Importantly, this acquisition delivers significant value to G1’s stakeholders by providing better and broader access to this important product for the cancer patients we seek to treat and a significant premium to our shareholders.”
The U.S. Food and Drug Administration approved Cosela on Feb. 12, 2021. So far, it’s only approved for use in the U.S. and China.
“It will be a focus for us to bring this important product to more patients both in U.S. and worldwide to help minimize the number of lung cancer patients suffering from myelosuppression after chemotherapy,” says Pharmacosmos CEO Tobias Christensen in a release.
G1 reported 2023 revenue at $82.5 million, compared to $51.3 million the year before. Its net loss in 2023 was $48 million, compared with $147.1 million the year before. The company forecast annual revenue of $60 million to $70 million for its drug Cosela.