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What GSK’s new cancer deal shows about pharma market

The announcement that pharma giant GlaxoSmithKline (GSK) is planning to spend $350 million plus to get a slice of a U.K. biotech's promising cancer drugs, on Monday, raised eyebrows for a couple of reasons.

GSK's deal with Adaptimmune, based in Oxford, involves a more collaborative approach than the tradition checkbook approach taken by big pharma to smaller biotechs, which is a growing trend as pharmaceutical companies try to spend less on risky early stage research and development.

"We are delighted to collaborate with GSK…Its substantial development and manufacturing expertise in key areas will be invaluable as we work together to accelerate the development of our programs and bring potentially breakthrough cancer therapies to patients," James Noble, chief executive officer of Adaptimmune, said in a statement.

Warren Little | Getty Images

The area of immuno-therapy in which Adaptimmune operates increasingly looks like the next frontier for medical research. If the medicines being developed fulfil their promise to help train the body to fight cancer (and many may not) they could effectively make many forms of cancer chronic or liveable-with, much like HIV has become in the West, rather than quick killers. They currently only make up around 3 percent of the treatments for cancer around the world, but this could reach 60 percent by 2023, according to Citi calculations.

It is an increasingly crowded marketplace, with Roche,dubbed the "immunotherapy ninja" by Citi analyst Andrew Baum, and AstraZeneca, which was recently targeted by Pfizer partly because of its immuno-oncology platform, currently leaders of the pack. Adaptimmune, which had several suitors for the treatments acquired by GSK, specializes in treatments which bolster the body's own T-cell defenses to fight cancers like multiple myeloma, melanoma,sarcoma and ovarian cancer.

This deal is also interesting because, less than two months ago, GSK made a high-profile and lucrative exit from most of its cancer business by selling it off toNovartis. This boosting of its own immuno-therapy business shows how eager the company is to get in at the cutting edge of research.

And at a time when there is a renewed focus on UK science after it came under the microscope during Pfizer's failed attempt to woo AstraZeneca, this is also a vote of confidence in the research being done in U.K.'s "golden triangle" of Oxford, Cambridge and London.

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