The acquisition hands GSK an experimental myelofibrosis treatment known as momelotinib, which previously passed through the hands of three other drugmakers. The drug was initially developed by Cytopia and then YM Biosciences before Gilead acquired YM and momelotinib for $510 million in 2012. But mixed results in one trial and negative data in another led Gilead to give up on momelotinib, sending its rights to Sierra in 2018 for just $3 million upfront.

That deal gave Sierra, formerly known as ProNAI Therapeutics, a new direction. Executives there took a different view than Gilead and pushed momelotinib into further testing. Their persistence paid off in January, when results from late-stage clinical testing showed the drug reduced symptoms by 50% or more in a significantly greater proportion of patients than did an older treatment.

At the time, Sierra said it planned to seek U.S. approval of momelotinib by June, a timeline GSK reiterated in its announcement of the deal.

Myelofibrosis can cause severe anemia and, relatedly, symptoms like fatigue, weakness and shortness of breath. Patients with anemia often require blood transfusions as a result. Stem cell transplants are used to treat some, while others are given drugs like Incyte’s Jakafi and Bristol Myers Squibb’s recently approved Inrebic.

Like Jakafi and Inrebic, momelotinib targets proteins called Janus kinases (as well as another protein those drugs don’t.) In some cases, however, Jakafi and Inrebic can worsen anemia. By comparison, momelotinib showed it can reduce anemia and free some patients from needing frequent transfusions.

GSK is betting the drug’s ability to fill that need will yield a top seller, forecasting the drug will begin to contribute to its bottom line in 2023.

But it’s unclear how large that opportunity is. Physicians surveyed by RBC Capital Markets analyst Brian Abrahams indicated the drug would mostly be used in patients who don’t respond to Jakafi or have severe anemia.

“We believe Jakafi remains the preferred option for physicians in myelofibrosis,” he said, estimating, based on feedback, that other, similar drugs like momelotinib would likely only capture about 15% of the market.

For GSK, momelotinib adds to its pipeline of hematology drugs, which includes the multiple myeloma medicine Blenrep. The drugmaker has spent the past few years rebuilding its drug pipeline through dealmaking and higher investment in research and development, while stepping back from consumer products.

The deal, one of two biotech company acquisitions announced Wednesday, is also a positive sign for a sector still suffering from a market downturn. The pace of initial public offerings, an important source of funding for young biotechs and of returns for their investors, has slowed considerably. Many publicly traded biotechs have seen their stock prices tumble and are conserving cash. Dozens have announced restructurings or job cuts over the last few months.

M&A could help lift the sector. Investors and analysts expect a surge in deals this year, as company values have dipped and many large drugmakers hold billions of dollars in cash.

Up until Wednesday, however, few deals had materialized. According to data compiled by BioPharma Dive, drugmakers spent about $3.4 billion on six deals through the first three-plus months of 2022. By this time last year, they’d spent $16 billion on 10 acquisitions.