Sirtris Exec Says Acquisition by GlaxoSmithKline is “Great for Boston”
After financial markets closed today, news broke that pharmaceutical giant GlaxoSmithKline (NYSE: GSK) will pay $720 million to acquire Cambridge, MA-based Sirtris Pharmaceuticals (NASDAQ: SIRT), which is researching and testing drugs for ageing-related conditions such as diabetes and cancer. A few minutes ago I spoke with Michelle Dipp, Sirtris’s corporate development director, about the acquisition. Here’s how the call went:
Xconomy: Congratulations. This is big news for Sirtris.
Michelle Dipp: Thanks. We’re really excited. This is an important step for our company, and we think that it’s great news for the company, the employees, the shareholders, and even for Boston.
X: Well, let’s talk about that. Often, when a far-away pharmaceutical giant buys a local biotech firm, there’s a general sense of disappointment—a feeling that this was a homegrown enterprise and now control is slipping away.
MD: I actually think it’s very different in this case. The reason is that Sirtris will operate as an autonomous unit of GlaxoSmithKline’s drug discovery organization. While it will become part of GSK, we will continue to operate here in our facilities in Cambridge, and in fact we will expand. We will not fully integrate into GSK. We will be owned by GSK, but we will expand and will operate independently.
X: Just last year Sirtris went public, and now you’re being acquired. In effect, you pursued one of the exits available to a startup, and now you’re taking the other. What opportunities does an acquisition present that going public didn’t?
MD: When you continue to access capital through the public market, you are forced to dilute yourself. This [offer] is a great deal for shareholders. It represents a really high multiple. Less than a year ago, we went public at $10 a share. This offer is for $22.50 a share, which is a really fantastic premium for our shareholders.
X: Right—it comes to $720 million. Does the company consider that a fair offer?
MD: Absolutely, yes, we think it’s a fair offer. But we don’t decide that as a company—that’s a board decision, with advice from a legal team and a banking team. We have had a unanimous decision by the board of Sirtris.
X: When do you expect to see the first effects of the acquisition, such as possible expansion?
MD: The details haven’t been ironed out yet. But we anticipate that we would operate as we had expected to at least through the end of the year.
X: Will there be synergies between Sirtris’s research, which is focused on sirtuin activation treating ageing-related diseases, and GSK’s own drug discovery programs?
MD: That’s a great question. There will certainly be synergies to the extent that we will have access to GSK’s research and development, and they are obviously a much larger and more sophisticated pharmaceutical company. What we can offer them is our entrepreneurial culture. This is a very fast-paced atmosphere, and we are hoping to infect the GSK culture with the Sirtris culture.
X: Does GSK have any other local facilities around Boston that you’ll be working with?
MD: They do have labs in the Boston area, but we’ll be liaising mainly with their Philadelphia headquarters.