GSK Just Paid $950M for a Drug That Doesn't Exist Yet
GSK is paying $950 million in cash for a Canadian startup whose lead drug has never been tested in a single patient with pulmonary hypertension. The science behind the deal, and the market it's chasing, might explain why.
When a pharmaceutical giant writes a check for nearly a billion dollars, you'd expect to get something tangible in return. A blockbuster drug, maybe. A sprawling manufacturing facility. At least a fancy espresso machine.
GSK got a molecule that just finished testing in healthy volunteers.
The British pharma giant announced that it will acquire 35Pharma, a small Canadian biotech. No milestones. No contingencies. Just a flat payment at closing for a company whose lead drug hasn't even started testing in actual patients with the disease it's meant to treat.
So either GSK has lost its mind, or it knows something the rest of us don't.
The Billion-Dollar Bet on Blood Pressure in Your Lungs
To understand why GSK would pay this much for something this early, you need to understand the disease, and the gold rush happening around it.
Pulmonary arterial hypertension (PAH) is essentially high blood pressure, but in the arteries of your lungs instead of the rest of your body. Think of it like a traffic jam in the blood vessels connecting your heart to your lungs. Over time, the heart has to pump harder and harder to push blood through narrowing arteries. Eventually, it gives out.
PAH is rare, progressive, and until recently, really hard to treat well. The global market for PAH drugs sits at roughly $8.5 billion in 2025. That's already a substantial market.
And much of that growth traces back to one drug that changed everything.
The Winrevair Effect
In March 2024, the FDA approved Merck's Winrevair (sotatercept) for PAH. It was the first new class of PAH drug in over a decade, and it worked by targeting a biological pathway called activin signaling, basically telling the body to stop thickening blood vessel walls.
The results were transformative. For context, that's the kind of launch trajectory that makes pharma executives involuntarily loosen their ties.
But Winrevair isn't perfect. It carries a real bleeding risk because it also blocks proteins called BMP9 and BMP10, which play a role in blood clotting. For PAH patients (many of whom are already on blood thinners) that's a meaningful problem.
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And that imperfection is exactly where 35Pharma spotted its opening.
A Smarter Mousetrap
35Pharma's lead drug, HS235, goes after the same activin signaling pathway as Winrevair. Same basic idea, different execution. If Winrevair is a sledgehammer, HS235 is designed to be a scalpel.
The key difference is selectivity. HS235 was engineered to avoid blocking BMP9 and BMP10, which should theoretically reduce the bleeding risk that shadows Winrevair. It's like the difference between a weed killer that torches your entire lawn and one that only targets the dandelions.
But the drug's appeal doesn't stop at safety. Those are the kinds of bonus features that make a drug company's R&D team giddy, because they hint at applications far beyond just PAH.
GSK clearly sees a world where HS235 could be used for PH-HFpEF (pulmonary hypertension caused by a common type of heart failure) as well as broader cardiopulmonary and metabolic conditions. That dramatically expands the addressable market beyond traditional PAH.
GSK's Chief Scientific Officer Tony Wood highlighted the drug's potential protective effects across vascular, metabolic, and inflammatory pathways in diseases of the lungs, liver, and kidneys. That's not a niche play. That's a platform.
The Founder Who's Done This Before
The story behind 35Pharma adds another layer of intrigue. The company was founded by Ilia Tikhomirov, a serial biotech entrepreneur based in Montreal. This isn't his first rodeo, or his first exit.
Tikhomirov previously founded Forbius, which Bristol Myers Squibb acquired in 2020. Before that, he was at YM Biosciences, which Gilead bought. The man has a pattern: build a biotech around TGF-beta biology, develop it to a critical inflection point, and sell it to a pharma giant.
Board member Guy Braunstein is a pulmonologist who led global clinical development at Actelion before its jaw-dropping $30 billion acquisition by Janssen.
This isn't a team that stumbled into pulmonary hypertension. They've been orbiting this space for years, assembling people who know exactly how to build, and sell, companies in this therapeutic area.
The Smart Money Was Already In
35Pharma's investor roster reads like a who's-who of biotech venture capital. venBio Partners led the Series A. Logos Capital led the Series B, joined by Surveyor Capital and Marshall Wace. The company closed an oversubscribed $53 million Series C to push HS235 through clinical development.
For those investors, a $950 million all-cash exit on a Phase I asset is a spectacular return. It's the venture capital equivalent of flipping a house before you've even finished the kitchen renovation, except someone paid you mansion prices because they loved the blueprints.
Why GSK? Why Now?
GSK has been on an acquisition tear under its new leadership. The 35Pharma deal follows a $2.2 billion purchase of RAPT Therapeutics and a $1 billion licensing deal with Frontier BioSciences.
New CEO Luke Miels appears to be running a very different playbook than his predecessor. Where Emma Walmsley was cautious and methodical, Miels seems willing to pay up for assets that fit, even early-stage ones, if the science and market opportunity are compelling enough.
The strategy makes sense when you look at GSK's looming problem: patent cliffs. Several key products will lose exclusivity in the coming years, and GSK needs fresh revenue streams to fill the gap. Buying into a market with a drug designed to be better than the current market leader is one way to do it.
The Risks Are Real
Let's pump the brakes for a second, because $950 million for a Phase I drug is not without risk.
HS235 has only been tested in healthy volunteers so far. Trials in actual PAH patients haven't started yet. The leap from "safe and interesting in healthy people" to "actually works in sick patients" is where most drugs go to die. Roughly 90% of drugs that enter clinical trials never make it to market.
There's also the competitive angle. Merck isn't sitting still. Johnson & Johnson, United Therapeutics, and others are all developing next-generation PAH therapies. By the time HS235 could realistically reach the market (likely 2030 at the earliest) the competitive landscape could look very different.
And while HS235's improved selectivity is a nice story on paper, the proof will be in clinical data. Designing a drug to avoid BMP9/BMP10 inhibition is one thing. Proving that translates into meaningfully less bleeding in real patients is another.
The Bigger Picture
This deal tells us something important about where biotech M&A is heading in 2026. Big pharma is increasingly willing to pay premium prices for early-stage assets in validated therapeutic areas. Winrevair proved the market. Now everyone wants a piece, and they're willing to pay up before the clinical data catches up.
GSK is essentially paying $950 million for a hypothesis: that HS235 can do what Winrevair does, but better and safer. If they're right, the return could be enormous. If they're wrong, it's an expensive lesson.
But given the team behind 35Pharma, the clear differentiation from Winrevair, and the sheer size of the market opportunity, this looks less like a gamble and more like a calculated bet by a company that desperately needs its next growth engine.
The deal is subject to the usual regulatory approvals: U.S., Canadian competition, and foreign investment reviews. Nothing unusual for a transaction this size.
Now the real work begins. GSK bought the blueprint. Building the house will take years. But if HS235 delivers on its promise, this $950 million might end up looking like a bargain.
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