Gilead Sciences to Fly Kite Pharma for $11.9 Billion

Seeking a leadership position in cellular therapy, Gilead picks up a CAR-T innovator with a first to market treatment on the verge of approval.

Novel therapeutics developer Gilead Sciences announced plans to acquire chimeric antigen receptor T-cell (CAR-T) innovator Kite Pharma, Inc. in a deal valued at $11.9 billion. Anticipated to close by the fourth quarter of 2017, the definitive agreement structures a $180.00 per-share cash transaction that the boards of both Kite and Gilead unanimously approved on August 28th.

Taking an early leadership position in CAR-T therapy, Kite has an advanced non-Hodgkin lymphoma cancer fighter, axicabtagene ciloleucel (Axi-Cel), currently under review by U.S. regulators. The FDA has set a target action date of November 29, 2017, for the first-to-market treatment for aggressive refractory and relapsed blood cancers.

Gilead’s President and CEO, John F. Milligan, said the acquisition puts Gilead in a position of leadership, able to drive the future development of therapies to treat people with advanced cancers. “The field of cell therapy has advanced very quickly, to the point where the science and technology have opened a clear path toward a potential cure for patients,” said Milligan. Believing cell therapy will be the cornerstone of treating cancer, Milligan affirmed that the companies’ similar cultures make the acquisition a strategic fit.

According to the announcement, the near-term product opportunities for Axi-Cel are just the first among many attributes contributing value to the deal. Beyond FDA approval this year, Kite expects approval of Axi-Cel by the EMA in 2018 with the expectation of a robust pipeline. “From the release of our pivotal data for axi-cel, to our potential approval by the FDA, this is a year of milestones,” said Arie Belldegrun, Kite’s Chairman, President and CEO. Noting the value of his team’s great accomplishments, Belldergrun noted, “CAR T has the potential to become one of the most powerful anti-cancer agents for hematologic cancers. With Gilead’s expertise and support, we hope to fulfill that potential by rapidly accelerating our robust pipeline and next-generation research and manufacturing technologies for the benefit of patients around the world.”

Under its terms, Gilead agrees to promptly tender its offer to acquire all of the outstanding shares of Kite common stock for $180.00 per share. Following completion of the offer, Gilead is to acquire all remaining shares not tendered in the offer through a second step merger at the same valuation as the offer.

 

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