Gilead bags blood disorder drug with YM BioSciences buy

Thu Dec 13, 2012 4:26am IST

Related Topics

Stocks

   

(Reuters) - Gilead Sciences Inc said it would buy Canada's YM BioSciences Inc for about $510 million in cash, getting access to a second experimental drug to treat a rare blood and immune cell disorder.

Gilead shares closed down 0.14 percent at $76.23 on the Nasdaq, while YM's U.S.-listed shares closed up 77 percent at $2.88, just under Gilead's offer price.

YM's only drug, codenamed CYT387, is being tested in patients with myelofibrosis, a blood disorder with limited treatment options.

Gilead, which is conducting mid-stage trials of its own drug for the disorder, said it will begin a pivotal late-stage clinical trial of CYT387 in the second half of 2013.

Shares of Incyte Corp, which sells the only approved drug to treat myelofibrosis, closed down 6 percent at $16.75 on news of Gilead's deal with YM.

Incyte received $43.7 million from the sale of the drug, Jakafi, in the United States during July-September.

YM took hold of CYT387 with its acquisition of the Australian biopharmaceutical company Cytopia Ltd in 2010.

"It's a good outcome for YM because they bought the product for a relatively modest amount, and a good fit for Gilead's strategy of broadening its portfolio particularly in oncology," Edison Investment Research analyst Christian Glennie said.

Gilead said it will pay $2.95 per YM share and that it plans to fund the acquisition with cash on hand. The deal would be valued at about $465 million based on YM's outstanding shares, excluding options.

As of September 30, YM had cash and short-term deposits of C$125.5 million ($127 million), according to a filing.

"While the valuation is less than the $4-$5 fair value we had assumed for YM, ... there is a relatively low probability another party enters with a higher bid," Wells Fargo Securities analyst Brian Abrahams said in a note to clients.

The transaction is expected to close in the first quarter of 2013.

BofA Merrill Lynch and Bloom Burton & Co were financial advisers of YM, while Gilead was advised by Wilson Sonsini Goodrich & Rosati and Blake Cassels and Graydon LLP.

($1 = 0.9852 Canadian dollars)

(Reporting by Adithya Venkatesan and Shounak Dasgupta in Bangalore; Editing by Roshni Menon, Don Sebastian, Maju Samuel)

FILED UNDER:

Ebola Crisis

REUTERS SHOWCASE

Ten Years On

Ten Years On

10 years on, tsunami warning stumbles at the "last mile".  Full Article 

Exit Polls

Exit Polls

BJP unlikely to form Jammu & Kashmir govt - polls.  Full Article 

Forceful Conversions

Forceful Conversions

BJP distances itself from religious conversions.  Full Article 

Hopeful Dhoni

Hopeful Dhoni

India's new vintage nearly ready, says Dhoni.  Full Article 

Photo

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Ali Hospitalized

Ali Hospitalized

Boxing great Muhammad Ali hospitalized with pneumonia.  Full Article 

Going International

Going International

Bollywood’s Priyanka Chopra sets sights on American TV.  Full Article 

India This Week

India This Week

Some of our best photos from this week.   Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device   Full Coverage