The pharmaceutical giant has agreed to acquire Domantis for £230m (€340m).
The UK based company has developed miniature antibodies, which can overcome the restrictions in therapeutic applications commonly seen with larger biomolecules.
They achieved this miniaturisation by only producing the small part of the antibody or domain that actually binds to the target, disregarding the extra part of the protein.
These domain fragments are up to 13 times smaller than normal antibodies (around 110 amino acids long).
Traditionally, pharmaceutical companies have concentrated on developing small molecule drugs.
However, there is a growing trend towards developing so-called biopharmaceuticals: large molecules such as antibodies, vaccines and other therapeutic proteins.
However, the increased size means that they have to be administered by injection or infusion, in contrast to orally administered small molecules.
Antibodies are still an attractive research proposition to scientists though because they are highly selective, leading to targeted therapies.
Domantis discovered a way of facilitating their delivery while preserving this selectivity.
This leads to several advantages, including the ability to administer these so called domain antibodies (dAbs) orally, by inhalation or even through a cream.
Also, often a patient needs more than one antibody at once.
The scientists at Domantis realised that they could stitch different dAbs together so one drug can selectively bind to two different targets.
Chief science officer and co-founder of Domantis, Ian Tomlinson told DrugResearcher.com that each dAb does not interfere with the other's function and selectivity.
He said: "Each fragment behaves as an independent entity yet they are hard wired together."
The fragments are relatively simple to engineer and so scientists can change how strongly they bind to each specific target thus controlling the drugs overall effect.
They can also be produced using bacterial, yeast or mammalian cell systems enabling GSK to choose where to fit future products into their existing pipeline.
A further advantage of dAbs are that they are highly stable and remain active even under harsh conditions, such as freeze-drying.
Tomlinson explained that some of them can even be boiled and then cooled with no loss of activity.
This opens up an array of possibilities when considering manufacturing or storage.
Domantis claims to have built up a huge library of 100bn different dAbs.
Tomlinson said: "The skill is to fish out the one that binds to your target, which we have the technology to do.
It is a pretty neat trick and of course, it is all done without using animals which is great."
GSK will incorporate Domantis into their Biopharmaceuticals Centre of Excellence for Drug Discovery (CEDD), retaining all the UK staff.
"Domantis has pioneered the extension of antibody therapies to potentially far wider applications than has been possible with conventional antibodies," said Mike Owen, senior vice president of the Biopharmaceutical CEDD at GSK.