Gilead Nears Deal to Buy Immunomedics for More Than $20 Billion--2nd Update
September 12 2020 - 3:50PM
Dow Jones News
By Cara Lombardo and Jonathan D. Rockoff
Gilead Sciences Inc. is nearing a deal to buy biotech
Immunomedics Inc. and its prized breast-cancer drug for more than
$20 billion, according to people familiar with the matter.
Immunomedics has a market value of roughly $10 billion following
a recent surge in its stock, meaning that Gilead is paying up to
secure ownership of the company.
A deal could be announced Monday if not sooner, assuming talks
don't fall apart and a rival drugmaker doesn't jump in, some of the
people said.
Immunomedics, based in Morris Plains, N.J., sells breast-cancer
drug Trodelvy, which would be attractive to several large
drugmakers, many of which have set their sights on adding more
fast-growing oncology therapies to their portfolios.
Breast cancer is one of the most lucrative segments of the
world-wide cancer-drugs market, which EvaluatePharma pegs at $157
billion this year. Trodelvy has shown signs of success in treating
lung and other cancers too. At a medical conference this coming
week, Immunomedics is expected to present data on Trodelvy's
performance against bladder cancer.
In April, Trodelvy was approved in the U.S. to treat a form of
the disease that has spread to other parts of the body and is known
as triple-negative breast cancer.
Triple-negative breast cancer is an especially aggressive form
of the disease that pharmaceutical companies have struggled to
treat because it lacks the molecular targets that drugs can hone in
on. It accounts for 10% to 15% of breast cancers, according to the
American Cancer Society.
Discussions between Gilead and Immunomedics were initially
centered around a partnership before shifting to a full-fledged
takeover negotiation, some of the people said.
An acquisition would give Gilead -- an antiviral-drug leader
that has been seeking for years to build up its portfolio of
therapies for other diseases -- a foothold in the fast-growing
cancer drug market. And Gilead doesn't take on any risk that
regulators won't approve the drug, since they already have done
it.
The Foster City, Calif., company is best known for its
blockbuster hepatitis C offerings and HIV therapies. Most recently,
Gilead has drawn notice for Covid-19 drug remdesivir, which the
U.S. authorized for use in July and is expected to significantly
boost the company's revenue this year.
Cancer drugs, however, promise to provide Gilead a more enduring
business that could help the company offset declining sales of its
hepatitis C drugs and competition for its HIV franchise.
Gilead Chief Executive Daniel O'Day, who took the helm in March
2019, has since been inking deals designed to bolster the company's
portfolio. In 2019, it spent more than $5 billion deepening a
partnership with Belgian biotech firm Galapagos NV. Earlier this
year, it paid about $5 billion for biotech company Forty Seven Inc.
and its blood-cancer drug.
Write to Cara Lombardo at cara.lombardo@wsj.com and Jonathan D.
Rockoff at Jonathan.Rockoff@wsj.com
(END) Dow Jones Newswires
September 12, 2020 15:35 ET (19:35 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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