GSK Bets $10.6 Billion on Cancer with Nuvalent Takeover

GSK (GSK) has agreed to acquire U.S.-listed cancer drug developer Nuvalent (NUVL) for $10.6 billion in its largest deal in more than a decade, marking a decisive shift toward oncology under new chief executive Luke Miels as the British drugmaker races to build scale in lung cancer treatments.

The all-cash offer values Nuvalent at $124 per share, a 40% premium to its last closing price. Nuvalent shares surged nearly 40% in midday trading, while GSK closed marginally lower in London.

The acquisition represents a significant departure from the bolt-on deals that characterized GSK's recent dealmaking. Miels, who succeeded Emma Walmsley in January, is under pressure to demonstrate that the company can reach its target of £40 billion in annual revenue by 2031. "It's larger than the bracket because it was unusual," he told reporters. "It's essentially three products in one." He added that GSK's sales targets were not contingent on the deal.

Analysts noted that the scale caught some investors off guard, having anticipated transactions in the $2 billion to $4 billion range — in line with GSK's $2.2 billion acquisition of RAPT Therapeutics, its largest deal of the past 18 months. Nevertheless, the strategic rationale drew broad support. "We see the deal as a bold move from a new CEO in oncology, adding two imminent growth drivers," Bank of America analysts wrote.

Nuvalent's two lead lung cancer drugs — zidesamtinib and neladalkib — are both close to regulatory decisions, with U.S. rulings expected in September and November respectively. If approved, both could launch before year-end, and GSK believes each has multi-blockbuster potential. BofA estimated the pair could generate combined peak annual sales of $3 billion to $4 billion.

The deal also adds an early-stage HER2 lung cancer drug and several preclinical oncology programs to GSK's pipeline, as well as a platform to expand its experimental antibody-drug conjugate Ris-Rez, currently in late-stage testing. Miels said GSK had tracked Nuvalent for over a year, referring to it internally as "Nashville," and that data presented at a major medical conference last week proved decisive.

GSK reported a 43% rise in oncology sales last year to just under £2 billion, equivalent to roughly 6% of group revenue — a fraction of the 44% share that oncology represents at London-listed rival AstraZeneca (AZN). Analysts said the Nuvalent acquisition could also help offset the anticipated revenue impact from the 2028 patent expiry of dolutegravir, GSK's key HIV medicine.

Competitive risks remain, particularly for neladalkib, which targets the ALK mutation and will face pressure from Pfizer's (PFE) Lorbrena and Roche's Alecensa. James Eugene, analyst at Verso Investment Management, which holds GSK shares, said the company would need to navigate those dynamics carefully to capture meaningful market share.

Net of cash acquired, GSK's investment is estimated at $9.4 billion. The deal, expected to close in the third quarter of 2026, will be funded primarily through new and existing debt facilities alongside cash. GSK said it could result in a low single-digit percentage dilution to core earnings per share between 2026 and 2028, with the acquisition expected to be accretive to sales and operating profit from 2027 and to core EPS from 2029.