Gilead to buy cancer drug developer Immunomedics for $21 billion

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Gilead Sciences

There were a handful of interesting developments to note over the weekend. In the biotech world, Gilead Sciences (NASDAQ:GILD) announced that it had confirmed a whopping $21 billion acquisition of Immunomedics, a cancer drug developer with a very promising portfolio of candidates.

Gilead has made news earlier this year for its potential coronavirus treatment, remdesivir, which was one of the first antivirals announced that could treat COVID-19. However, the company has also been considering large acquisitions in the cancer immunotherapy market. Gilead confirmed on Sunday that it would buy buying out Immunomedics, whose top candidate is Trodelvy, a metastatic triple-negative breast cancer treatment that’s already been approved by the Food and Drug Administration (FDA).

This acquisition represents significant progress in Gilead’s work to build a strong and diverse oncology portfolio,” said Gilead’s Chief Executive Daniel O’Day in a statement. “Trodelvy is an approved, transformational medicine for a form of cancer that is particularly challenging to treat. We will now continue to explore its potential to treat many other types of cancer, both as a monotherapy and in combination with other treatments.”

It’s an important acquisition for Gilead, especially since its other business segments have been struggling. Its longstanding hepatitis C segment has struggled over the past few years as sales continued to decline. Cancer drugs, on the other hand, are one of the hottest treatment types out there in the healthcare sector. Cancer is, unfortunately, becoming increasingly prevalent throughout the world, and that presents a major opportunity for pharmaceutical and biotech companies looking to develop treatment options.

However, its far from certain whether or not this acquisition will end up being worth it for the company. The last time Gilead did something like this was in 2017, where it bought out a biotech company known as Kite Pharma for $12 billion. The deal ended up being a complete disaster for the company, with Gilead ending up having to write off the entire acquisition as a failure. This $21 billion acquisition could end up being a much bigger disaster for the company, but the current FDA approval of Trodelvy does help ease some of the concerns that shareholders have about this buyout.

Shares of Gilead are expected to shoot up on Monday morning in response to the news. So far this year, Gilead has seen its stock rise and fall dramatically in regards to its promising antiviral coronavirus treatment, remdesivir. However, shares have quickly fallen over the past couple of months as investors question just how effective the antiviral drug actually is, especially in comparison to the many other treatments being developed right now.

 

Gilead Company Profile

Gilead Sciences develops and markets therapies to treat life-threatening infectious diseases, with the core of its portfolio focused on HIV and hepatitis B and C. The acquisitions of Corus Pharma, Myogen, CV Therapeutics, Arresto Biosciences, and Calistoga have broadened this focus to include pulmonary and cardiovascular diseases and cancer. Gilead’s acquisition of Pharmasset brought rights to hepatitis C drug Sovaldi, which is also part of combination drug Harvoni, and the Kite acquisition boosted Gilead’s exposure to cell therapy in oncology. – Warrior Trading News

 

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