(Reuters) - Gilead Sciences Inc (GILD.O) said on Monday it would buy Forty Seven Inc (FTSV.O) for $4.9 billion in cash, adding an experimental treatment that targets blood cancer to its portfolio of oncology drugs.
Shares of Forty Seven jumped 62%, trading slightly below the offer price of $95.50 per share. Gilead shares were up 2.3% at $70.95 in early morning trading.
The deal is expected to compliment the portfolio of Kite Pharma Inc, which the company acquired for $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.
Through the acquisition, Gilead will have 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.
Initially focused on treating blood cancers called myelodysplastic syndromes, magrolimab could be used alongside Yescarta, a CAR-T therapy Gilead gained through the Kite acquisition, in the future, Gilead executives said.
“There are studies ongoing and data being generated in DLBCL, and that’s one of those areas where I think you could imagine that there could be ... possibilities,” Gilead Chief Medical Officer Merdad Parsey said.
