- Gilead to pay $115 per share, 79% premium for Arcellx
- Anito-cel under FDA review for multiple myeloma treatment
- Deal highlights Gilead's oncology growth strategy, CEO O'Day says
Feb 23 (Reuters) - Gilead Sciences will pay as much as $7.8 billion to acquire partner Arcellx in its largest deal since 2020, the biopharma company said on Monday, as it looks to strengthen its lineup of cancer treatments.
The company, with a strong foothold in HIV drugs and liver disease treatments, has been looking for growth beyond its core areas as it faces declining sales of its COVID-19 drug Veklury and prepares for future patent losses.
It will pay $115 per share in cash, which is at a premium of 79% to the stock's last close.
Shares of Arcellx were trading up 78.5% at $114.46, while Gilead fell about 1% before the bell.
Kite Pharma, a unit of Gilead Sciences, was partnering with Arcellx to jointly develop and sell anito-cel - an experimental CAR-T therapy for multiple myeloma, a type of blood cancer.
J.P.Morgan analyst Christopher Schott sees anito-cel as a "multi-billion dollar product for Gilead over time" that is "well positioned to take share in the myeloma market".
The U.S. Food and Drug Administration is currently reviewing the therapy as a fourth-line treatment for patients with relapsed or refractory multiple myeloma, with a decision expected by December 23 this year.
RBC Capital Markets analyst Brian Abrahams said anito-cel has shown generally comparable efficacy and the potential for a better safety profile when compared to Johnson & Johnson and partner Legend Biotech's therapy Carvykti.
This is Gilead's biggest deal since its $21 billion buyout of Immunomedics, giving it access to Trodelvy, an antibody-drug conjugate used to treat a type of advanced breast cancer.
Gilead CEO Daniel O'Day said anito-cel's unique targeting technology could help Gilead develop next-generation cell therapies, strengthening its potential in oncology and inflammation treatment.
Upon FDA approval of anito-cel, the proposed transaction is expected to be accretive to earnings per share in 2028 and beyond.
Gilead will also pay Arcellx shareholders $5 per share, contingent upon the achievement of cumulative anito-cel global net sales of at least $6 billion from launch through the end of 2029.
Reporting by Christy Santhosh in Bengaluru; Editing by Leroy Leo and Pooja Desai
Source: Reuters