Glaxo Buying Sirtris Pharma

The planned purchase of the biopharma comes at a $10-a-share premium over Tuesday's closing price.
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GlaxoSmithKline (GSK) - Get Report announced Tuesday after the market closed that it is buying Sirtris Pharmaceuticals (SIRT) for $720 million, or $22.50 a share.

Sirtris shares closed down 4% Tuesday prior to the news, at $12.23.

Big pharma companies, pained by generic competition, have turned to licensing deals and acquisitions to bolster their pipelines.

Sirtris is a biopharmaceutical company that's developing drugs to target a class of enzymes called sirtuins. Its SIRT-501, which is in early-stage development, is an enhanced formulation of resveratrol (the healthful agent found in red wine) that targets one of those enzymes, SIRT1.

The company also has discovered new chemical entities that are significantly more potent activators of SIRT1 and should enter the clinic this year, according to some analysts.

Post-acquisition, Sirtris will become part of Glaxo's drug discovery organization, while continuing to operate from laboratories in Cambridge, Mass., as an autonomous drug discovery unit. CEO Christoph Westphal and the management team will continue to lead the unit.

The acquisition has been approved by the boards of both companies, and is expected to close in the second quarter. The news comes a day before Glaxo's quarterly earnings release.

Glaxo's shares edged up 9 cents, or 0.2% to $43.82 in recent post-market trading.