Gilead bags blood disorder drug with YM BioSciences buy
(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)
- Tweet this
- Share this
- Digg this
- UPDATE 4-Malaysia Airlines plane crashes in South China Sea with 239 people aboard - report
- Malaysian plane with 239 aboard crashes - report
- UPDATE 3-U.S. FDA probes cognitive impact of new cholesterol drugs
- Malaysia Airlines loses contact with plane carrying 239 people
- No signal picked up from missing Malaysia Airlines plane - Vietnam official
When President Bill Clinton announced in 2000 that Craig Venter and Dr. Francis Collins of the National Human Genome Research Institute had succeeded in mapping the human genome, he solemnly declared that the discovery would "revolutionize" the treatment of virtually all human disease. Full Article