Wave of Biotech Acquisitions: Eli Lilly, Vidac Pharma, and GSK in the Spotlight

GSK Snaps Up Nuvalent

An investment in GSK has not been a particularly rewarding proposition in this century. Following the stock market crash in the wake of the dot-com bubble, the share price delivered little performance excluding dividends. Investors would have fared much better with other stocks. That has only really changed since mid-2025. After that, the stock rose by more than 50% within seven months at its peak. But now there has been a bombshell. After ten years of inactivity—apart from minor acquisitions—the British pharmaceutical group is once again venturing into a major deal with the purchase of Nuvalent. Approximately USD 10.6 billion in cash is being put on the table for the US biotech company. The premium over the current share price is a whopping 40%. With this move, Luke Miels, the new CEO who has been in office since the beginning of the year, is sending a clear message: GSK intends to expand its presence in oncology.

Nuvalent is considered a technological gem in the field of non-small cell lung cancer. With the acquisition, GSK secures three active ingredients at once, two of which are already on the verge of market approval. Decisions from the US Food and Drug Administration (FDA) are expected in the fourth quarter. The market initially reacted negatively to the acquisition, pushing the stock into the red. Operationally, however, GSK was under pressure, as patent protection for the blockbuster drug Dolutegravir (HIV) expires in 2028, which is likely to bring generic competitors to the market. More than USD 3 billion in annual revenue is at stake here. According to analysts, the two Nuvalent drugs now nearing approval have a combined market potential of USD 5-7 billion.

Financially, GSK can afford the deal; the acquisition will be financed with its own cash and existing credit lines. The pharmaceutical company also reported relatively solid figures for the first quarter. However, Nuvalent's impact will initially be negative in the coming years, as the launch of the cancer drugs will weigh on earnings. They are not expected to contribute fully to profit growth until 2029.

The acquisition will have no impact on dividends. Management plans to pay 70 pence per share in 2026, corresponding to a dividend yield of around 3.8%. However, there will be no major share buyback programs for the time being; instead, the company is focusing on reducing debt. GSK's stock currently trades at a 2027 P/E ratio of around 10, putting it far behind its US competitors. In essence, the market is pricing in the expiration of the HIV patent.

Those with patience and an eye on dividends can lie in wait over the coming months. Major jumps in the share price are not expected until the final quarter, when regulatory decisions on the Nuvalent drugs are made.

Vidac Pharma Aims to Reprogram Cancer Cells

New approaches are needed in the healthcare industry. This is especially true where the side effects of existing treatments are severe. Vidac Pharma is one of the small companies seeking to fight cancer with a revolutionary technology. Headquartered in London, with its primary listing there and operations across Europe, the company is pursuing an innovative approach to oncology.

Vidac's unique differentiator is its modulation of tumour metabolism. The mechanism works as follows: the enzyme Hexokinase-2 (HK2) attaches itself to pores in the mitochondria—the powerhouses of every cell. This enables cancer cells to evade the body's immune defenses. To counter this process, Vidac's active ingredient does not block the enzyme itself—which would be fatal to a healthy cell—but instead physically prevents HK2 from binding to the mitochondrial pores. In effect, the cancer cell is reprogrammed, restoring its natural process of programmed cell death (apoptosis), while the patient's healthy tissue remains unaffected.

This approach is not merely a theoretical concept—it is now being tested in human patients. A few months ago, Vidac Pharma successfully administered the first dose to a patient in a Phase 2b clinical trial at Centroderm GmbH in Wuppertal under the direction of the renowned oncodermatologist Professor Dirschka. The study is targeting lesions caused by Actinic Keratosis, a precancerous form of non-melanoma skin cancer. This condition is caused by excessive sun exposure. The affected cells in these skin lesions divide and proliferate extremely rapidly and uncontrollably. These are precisely the high-risk cases where there is an acute danger that the skin cancer will metastasize. The data from this Phase 2b study will be used to precisely characterize the drug's efficacy and safety in this high-risk patient group. If the study is successful, the results will help determine the design of the subsequent Phase 3 regulatory trial, which would be required to bring the drug to market.

And the market is enormous, even in Germany alone. According to data from the Robert Koch Institute, cases of non-melanoma skin cancer have surged in recent years. It primarily affects baby boomers and older seniors. And there is a reason for this. This generation enjoyed carefree sunbathing in the 1970s and 1980s; a deep tan was a symbol of prosperity and vitality. However, sun protection was not a concern, as it was for many customers of tanning salons during their heyday. This is now coming back to haunt us. In 2024, 120,100 people were hospitalized for a skin cancer diagnosis. That is a 94.5% increase compared to 2004. For this year, the cancer registry expects around 355,000 new cases of skin cancer, including early-stage actinic keratosis. And the death toll is also alarming: it has risen by about 36% since 2005, and for non-melanoma skin cancer, the increase was as high as 141%.

A vast market therefore awaits Vidac Pharma's active ingredients. The company's stock appears to be only at the very beginning of what could become a successful growth story. Vidac currently has a market capitalization of about EUR 30 million. If the early clinical studies prove successful, the traditional value-creation pathways common in the pharmaceutical industry become possible: out-licensing agreements, strategic partnerships, or even a potential acquisition by a larger pharmaceutical company.

Eli Lilly: Only the Pipeline Keeps Getting Bigger

Eli Lilly's stock is one of the industry's top performers. In the past five years alone, the share price has more than quintupled. A share now costs nearly USD 1,150, and the market capitalization exceeds USD 1 trillion. There is a reason the stock is trading near its all-time high. By far the biggest driver of the share price was the development and market launch of tirzepatide. As a dual receptor agonist, this substance serves two of the world's most attractive markets: type 2 diabetes and obesity. In the latter case, the company essentially created a mega-market in collaboration with Novo Nordisk, as evidenced by the revenue figures. In 2021 alone, Eli Lilly recorded revenue of approximately USD 28.3 billion. Last year, that figure was USD 65.2 billion—more than double the previous amount. About half of the company's revenue now comes from these two therapeutic areas. These days, there is significant money to be made, particularly by capitalizing on people's desire to have the most perfect body possible.

But Eli Lilly is more than that. In oncology, the company holds a leading position with the breast cancer drug Verzenio. In 2024, the company entered the market for the treatment of early-stage Alzheimer's disease with the approval of Kisunla. Last but not least, it also has a strong presence in the field of immunology. The product mix of patent-protected, high-priced drugs enables Eli Lilly to generate extremely high profits, with the gross margin remaining stable above the 80% mark.

This is also evident in the latest record quarter. Between January and March 2026, Eli Lilly generated USD 19.8 billion in revenue, a 56% increase, and net income climbed 168% to USD 7.4 billion. Market expectations were exceeded, and the full-year revenue forecast was raised to USD 82-85 billion. Management remains committed to paying dividends to its shareholders. However, the yield is extremely low at 1% due to the rise in the stock price. The company continues to focus on expanding production and its pipeline. In total, several billion dollars have already been invested in acquisitions this year. Eli Lilly remains on a growth trajectory. This partially justifies the high valuation. In difficult market conditions, defensive pharmaceutical stocks are considered favourites among institutional investors.

After many lean years, GSK wants to grow again but must also work on its balance sheet (debt!). As a defensive stock with a high dividend, however, the stock should not be underestimated. Vidac Pharma could fall victim to a takeover in a few years. With an active ingredient for skin cancer, the company is operating in an attractive market environment. Eli Lilly is the star of the pharmaceutical industry and remains on a growth trajectory. The stock has defensive qualities like GSK, but is now highly valued.