Sirtris Major Buyout Premium From GlaxoSmithKline, Public Under a Year (SIRT, GSK)

GlaxoSmithKline (NYSE: GSK) has announced that it has entered into a definitive acquisition pact with Sirtris Pharmaceuticals Inc. (NASDAQ: SIRT).

The drug giant will pay approximately $720 million via a cash tender offer of $22.50 per share.  Sirtris closed down 4% at $12.23 today on less than 90,000 shares.

As a result of the buyout, GSK will enhance its metabolic, neurology, immunology and inflammation research efforts with the establishment of a presence in the field of sirtuins.  This recently discovered class of enzymes is believed to be involved in the aging process and Sirtris Pharmaceuticals has established a drug discovery capability to exploit sirtuin in human diseases, which could generate multiple clinically and commercially products. To date, Sirtris has been in the development of a treatment of Type 2 Diabetes Mellitus.

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Interestingly enough, Sirtris has only been public less than a year,and its trading range has been almost entirely in a range of $10 to $20since.  Based on no major stock move in the last 5-days and based onstock options having an extremely low open interest, it looks like amerger actually occurred that it doesn’t appear traders caught anymajor wind of.

Here was the original filing, which showed JPMorgan, CIBC, Piper Jaffray, JMP Securities, and Rodman & Renshaw as its underwriters.

Jon C. Ogg
April 22, 2008

Jon Ogg is a producer of and editor for both the Special Situations newsletter and the "10 Stocks Under $10" weekly newsletter for 247WallSt.com; he can be reached at [email protected] and he does not own securities in the companies he covers.