Gilead Sciences to buy Immunomedics Inc for £16.32 billion

Gilead Sciences to buy Immunomedics Inc for £16.32 billion
Written by:
Wajeeh Khan
14th September, 12:56
  • Gilead Sciences to buy Immunomedics Inc for £16.32 billion.
  • The acquisition will expand Gilead's footprint in Oncology.
  • Gilead will buy Immunomedics’ outstanding shares at £68.3 per share.

Gilead Sciences Inc (NASDAQ: GILD) said late on Sunday that it will buy Immunomedics (biotech company) for £16.32 billion. The acquisition will help Gilead expand its footprint in oncology as it brings Immunomedics (NASDAQ: IMMU) promising cancer drug, Trodelvy, under its umbrella.

At £50.90 per share, Gilead Sciences is currently trading around the same level in the stock market at which it started the year 2020. It had touched a year to date high of £65.28 per share in late April. Here’s what you need to know about the value investing strategy.  

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Trodelvy received accelerated approval from the U.S. FDA

Trodelvy received accelerated approval from the U.S. FDA earlier this year in April to be used in patients with an aggressive form (triple-negative) of breast cancer that is hard to treat. As per Immunomedics’ statement on Monday, it is also scheduled to seek regulatory approval in Europe for its cancer drug in the first six months of 2021.

Gilead is expected to buy Immunomedics’ outstanding shares at a per-share price of £68.39 that roughly represents a 108% premium on £32.83 per share, at which the biotech firm closed the regular session on Friday. CEO Daniel O’Day of Gilead commented on the news and said:

“This acquisition represents significant progress in Gilead’s work to build a strong and diverse oncology portfolio. 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.”

According to Gilead Sciences, it will raise £4.66 billion via newly issued debt to fund the deal. The remaining, it added, will come from £11.66 billion that it already has on hand. The transaction, as per Gilead, is likely to complete before the start of 2021.

Gilead announced several other acquisitions in 2020

Gilead announced several other acquisitions this year that were targeted at broadening its cancer portfolio. In June, it invested £213.71 million to get a 49.9% stake in Pionyr Immunotherapeutics (cancer drug developer).

It also acquired Forty Seven Inc earlier in 2020 for £3.81 billion, that caught Gilead’s interest due to its experimental treatment aimed at curing blood cancer. In related news from the global pharmaceutical industry, AstraZeneca said on Monday that its late-stage clinical trial for a candidate COVID-19 vaccine is set to resume shortly.

At the time of writing, Gilead Sciences has a market cap of £63.90 billion.

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