Gilead Sciences Inc. (NASDAQ: GILD) shares have been in a holding pattern for a while. Analysts have said that the firm needs to make a move to shake up this situation, otherwise this could turn into something worse. Almost in response to this idea, the firm has decided to acquire Kite Pharma Inc. (NASDAQ: KITE).
Under the terms of the deal, Gilead is acquiring Kite for $180 per share in cash. The transaction, which values Kite at approximately $11.9 billion, was unanimously approved by both the Gilead and Kite boards of directors and is anticipated to close in the fourth quarter of 2017.
For some quick background: Kite is an industry leader in the emerging field of cell therapy, which uses a patient’s own immune cells to fight cancer. The company has developed engineered cell therapies that express either a chimeric antigen receptor (CAR) or an engineered T cell receptor (TCR), depending on the type of cancer. Kite’s most advanced therapy candidate, axicabtagene ciloleucel (axi-cel), is a CAR T therapy currently under priority review by the U.S. Food and Drug Administration (FDA).
John F. Milligan, PhD, Gilead’s president and CEO, commented:
The acquisition of Kite establishes Gilead as a leader in cellular therapy and provides a foundation from which to drive continued innovation for 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. We are greatly impressed with the Kite team and what they have accomplished, and share their belief that cell therapy will be the cornerstone of treating cancer. Our similar cultures and histories of driving rapid innovation in order to bring more effective and safer products to as many patients as possible make this an excellent strategic fit.
Shares of Gilead were last seen at $75.25, with a consensus analyst price target of $80.05 and a 52-week range of $63.76 to $82.07.
Kite shares were recently trading up almost 29% at $179.20, with a consensus analyst price target of $109.91 and a 52-week range of $39.82 to $143.00.