UNITED STATES – Gilead Sciences Inc, an American biotechnology company that researches, develops and commercializes drugs, has said it would buy Forty Seven Inc for US$4.9 billion in cash.
According to Reuters, the planned acquisition of Forty Seven will result in the addition of an experimental treatment that targets blood cancer to Gilead’s portfolio of oncology drugs.
The news of the planned purchase resulted in the shares of Forty Seven appreciating by 62%, trading slightly below the offer price of US$95.50 per share.
Gilead shares on the other hand, rose by 2.3% to trade at US$70.95 soon after the announcement.
The deal is expected to complement the portfolio of Kite Pharma Inc, which the company acquired for US$12 billion in 2017, and comes at a time when sales of Gilead’s hepatitis C drugs have seen a steep fall.
“The deal is in line with the strategy CEO Daniel O’Day had laid out earlier in the year, but I think he and his management need to do something more impactful,” Credit Suisse analyst Evan Seigerman told Reuters.
The acquisition will give Gilead access to Forty Seven’s lead drug, magrolimab, which switches off a “do not eat me” signal known as CD47 expressed by tumor cells that lets them avoid destruction. The drug is in early-stage testing.
CD47 antibodies are a relatively new class of drugs in development for treating cancer, a lucrative but difficult market to enter for drugmakers.
Gilead executives said that Magrolimab, which was initially focused on treating blood cancers called myelodysplastic syndromes, could in future be used alongside Yescarta, a CAR-T therapy Gilead gained through the Kite acquisition.
Gilead Sciences was founded in June 1987 by Michael L. Riordan, a medical doctor who graduated from Washington University in St. Louis, the Johns Hopkins School of Medicine and the Harvard Business School.
The company’s primary therapeutic focus was, and continues to be, in antiviral medicines used in the treatment of HIV, hepatitis B, hepatitis C, and influenza, including Harvoni and Sovaldi.
According to Forbes Magazine, the field that interested Riordan because he contracted dengue fever, an untreatable viral disease, while working in malnutrition clinics as a Henry Luce Scholar in the Philippines.