USA – Gilead Sciences is set to broaden its medical arsenal with the acquisition of CymaBay Therapeutics and its innovative liver disease drug in a monumental US$4.3 billion deal that was unveiled on Monday.
This move will equip Gilead with a promising treatment for primary biliary cholangitis (PBC), a persistent condition affecting approximately 130,000 individuals in the United States alone.
The target of this acquisition, CymaBay, revealed that its drug, seladelpar, has been under the scrutiny of the Food and Drug Administration (FDA), with an approval decision expected by mid-August.
Should the FDA green-light the drug, Gilead stands to benefit significantly, with projections indicating potential revenue growth and increased earnings per share post-2025.
Under the terms of the agreement, Gilead will pay US$32.50 per share of CymaBay, marking a 27% premium compared to the stock’s closing price on Friday.
This deal signifies a remarkable turnaround for CymaBay, which had faced challenges in its research endeavors following a setback in a clinical trial over four years ago.
Expressing enthusiasm over the deal, CymaBay CEO Sujal Shah hailed that the company was dedicated to advancing seladelpar, as part of its bid to offer renewed hope to individuals grappling with PBC and their families.
For Gilead, this acquisition aligns with its ongoing strategy under CEO Daniel O’Day, who has spearheaded numerous acquisitions and partnerships since assuming leadership in early 2019.
Acquisition hints Gilead’s return to liver disease treatments
While Gilead has primarily focused on oncology in recent deals, this move signifies a return to its roots in liver diseases, an area where the company has previously achieved notable success with hepatitis C treatments.
Seladelpar, initially developed for metabolic dysfunction-associated steatohepatitis (NASH), faced setbacks in its development journey but has shown promise in treating PBC. Results from Phase 3 trials demonstrated its superiority over placebo, potentially positioning it as a competitor to Intercept Pharmaceuticals’ Ocaliva.
Analysts anticipate robust sales potential for seladelpar, with estimates ranging from $500 million to US$2 billion in peak annual sales. The boards of both Gilead and CymaBay have greenlit the acquisition, expecting to finalize the deal in the first quarter of the year.
The announcement has sparked investor optimism, reflected in the uptick of Gilead’s shares by 0.5% on Monday morning, while CymaBay’s stock climbed near Gilead’s proposed buyout price.
This acquisition marks another development in the biotech sector, which has seen a flurry of deal-making activity since the previous fall, setting a strong tone for 2024.