Gilead Sciences Acquires CymaBay Therapeutics for $4.3 Billion in Cash

Gilead Sciences announced Monday that it will acquire clinical-stage biotech CymaBay Therapeutics for $4.3 billion, gaining seladelpar, an investigational treatment for primary biliary cholangitis (PBC) that is currently under FDA priority review.

PBC is a progressive autoimmune disease that damages the bile ducts in the liver, causing bile acid buildup that can lead to irreversible scarring and liver failure. An estimated 130,000 Americans live with PBC, which mostly affects women over 40.

CymaBay’s seladelpar is an oral selective peroxisome proliferator-activated receptor delta (PPARδ) agonist that targets metabolic and inflammatory pathways involved in PBC. Data from late-stage studies demonstrate seladelpar’s potential as a best-in-class therapy for second-line PBC patients who don’t respond adequately to first-line treatment with ursodeoxycholic acid (UDCA).

The drug received breakthrough therapy and orphan drug designations from the FDA and EMA based on positive mid-stage results. In December 2022, CymaBay submitted a new drug application to the FDA, which was granted priority review last month. An approval decision is expected by August 14, 2024.

According to the phase 3 RESPONSE trial, seladelpar achieved significant improvements in reducing alkaline phosphatase levels and relieving itch symptoms compared to placebo. Nearly 62% of patients on seladelpar attained a biochemical response versus 20% on placebo.

Gilead aims to leverage its extensive experience in developing treatments for liver diseases like hepatitis C and nonalcoholic steatohepatitis (NASH) to advance seladelpar. The deal expands Gilead’s presence in the PBC space, complementing its existing medicine Ocaliva, which is approved as a second-line option.

noble virtual healthcare conference

Mark your calendars! Don’t miss Noble Capital Markets’ Emerging Growth Virtual Healthcare Equity Conference on April 17-18. This exclusive virtual event connects investors with 50 leading public biotech, healthcare services, and medical device companies. Presenting company slots are available…Learn More

“We are looking forward to advancing seladelpar by leveraging Gilead’s long-standing expertise in treating and curing liver diseases,” commented Gilead CEO Daniel O’Day. “Building on the strong R&D work by the CymaBay team, we have the potential to address a significant unmet need for people with PBC.”

Under the terms of the agreement, Gilead will commence a tender offer to acquire all outstanding CymaBay shares at $32.50 per share in cash, representing a 27% premium over the stock’s closing price on February 9. Following the tender offer, Gilead will mop up any untendered shares via a second-step merger at the same price.

The deal is anticipated to close in the first quarter of 2024, subject to customary closing conditions and regulatory clearances. Once the transaction is completed, CymaBay will become a wholly owned subsidiary of Gilead.

Gilead expects the buyout will boost its top-line revenue growth, while being neutral to earnings per share in 2025 before turning significantly accretive thereafter.

For CymaBay, the takeover marks the culmination of years of effort advancing seladelpar into late-stage testing and regulatory review. “Now that seladelpar has achieved priority review with the FDA, we are excited that Gilead can apply its expertise to bring seladelpar as quickly as possible to people with PBC,” noted CymaBay CEO Sujal Shah.

The profitable exit provides a major return for CymaBay investors, as the purchase price represents a substantial premium over the stock’s pre-announcement valuation. CymaBay shares have languished below $4 for much of the past two years.

Gilead has actively pursued M&A to augment its pipeline and product portfolio across therapeutic areas like oncology, inflammation, and antivirals. The company faces looming patent expiries on flagship HIV medicines. New growth drivers like seladelpar could help offset that impact.

PBC currently affects a relatively small patient population, but analysts project seladelpar could generate peak annual sales above $1 billion. Gilead likely sees potential to expand seladelpar’s utility to other cholestatic liver diseases.

Nonetheless, the deal does carry risks for Gilead. Seladelpar’s broad mechanism regulating gene expression raises safety concerns about potential side effects. Patients in late-stage testing experienced elevations in low-density lipoprotein cholesterol.

By acquiring CymaBay outright, Gilead shoulders all future R&D costs rather than opting for a partnership deal to share expenses. If seladelpar encounters any regulatory or commercial setbacks, Gilead lacks an immediate fallback option for its PBC program.

But with priority review underway and approval expected within six months, Gilead moved aggressively to lock up rights to a promising PBC candidate. Adding seladelpar provides another growth avenue beyond HIV and bolsters Gilead’s mission of delivering transformative medicines for underserved diseases.

Gilead Deepens Arcus Ties With $320M Investment to Accelerate Cancer Immunotherapy Pipeline

Gilead Sciences and biotech partner Arcus Biosciences announced Tuesday an amended collaboration to accelerate development of their cancer immunotherapy programs, along with a $320 million equity investment by Gilead.

The deal builds on the companies’ 2020 partnership and boosts Gilead’s ownership in Arcus to 33% through an additional stake purchase at $21 per share. Gilead also gains a third seat on Arcus’ board, having their Chief Commercial Officer Johanna Mercier join as a director.

Strategic Focus on TIGIT

A key change is prioritizing late-stage studies for the anti-TIGIT antibody domvanalimab, the lead candidate from the collaboration. Arcus CEO Terry Rosen stated the partners want to “leverage their strengths and focus on efficiently advancing novel combinations.”

Domvanalimab is progressing in Phase 3 for non-small cell lung cancer and gastric/GEJ cancer. By accelerating these pivotal studies, expected to fully enroll by year-end, the drug could reach approval sooner if successful.

However, they are discontinuing the ARC-10 Phase 3 lung cancer trial to devote resources to the other domvanalimab studies targeting greater unmet need.

This streamlining highlights the companies’ faith in TIGIT’s potential but the necessity to optimize their most promising assets. TIGIT is an emerging immunotherapy target and domvanalimab a next-gen asset, so focusing late-stage research is prudent.

Quemliclustat Now Solo Arcus Program

Meanwhile, the planned Phase 3 study of Arcus’ CD73 inhibitor quemliclustat in pancreatic cancer will become an Arcus-only program, no longer jointly developed.

Again the theme is concentrating human capital and financial resources where they can make the biggest difference. For smaller Arcus, independence for some programs provides flexibility.

Arcus can also now fully control projects beyond domvanalimab and their PD-1 drug zimberelimab, which Gilead has options to license. This benefits Arcus’ broader pipeline and product vision.

Extends Arcus Cash Runway

Importantly, the $320 million cash infusion lengthens Arcus’ funding horizon until 2027 by their estimates. This enables advancing Phase 3 quemliclustat and AB154 studies plus potential commercial launch activities without financing concerns.

Any biotech developing novel drugs without revenue benefits immensely from having ample cash reserves. This partly protects Arcus from market volatility and general biotech funding challenges.

Gilead Building a Powerhouse

For Gilead, the enhanced Arcus alliance adds another pillar to their ambitions cancer franchise. The pharma giant has been aggressively wheeling and dealing to expand in oncology, now a key growth area.

Recent moves include the $21 billion Immunomedics acquisition and purchases of companies like Tango Therapeutics, Dragonfly Therapeutics, and Epizyme. The Arcus pact leverages access to next-generation immunotherapy science and pipeline.

Gilead is constructing a vertically integrated oncology player combining in-house and external innovation. Scale and synergies across R&D, manufacturing, and commercialization can accelerate targeted therapies to patients.

With collaborators like Arcus doing the early lifting, Gilead can then optimize late-stage studies and apply their regulatory expertise to reach approvals more quickly.

Overall the amended Arcus agreement highlights Gilead’s commitment to cancer and immunology while bolstering their presence in cutting-edge research like TIGIT inhibition. With the investment and restructuring, Gilead strengthens ties to Arcus’ science while keeping the biotech funded and focused. For both, it’s a win-win accelerating cancer drugs to market.

noble capital markets emerging growth virtual healthcare equity conference

Mark your calendars! Don’t miss Noble Capital Markets’ Emerging Growth Virtual Healthcare Equity Conference on April 17-18. This exclusive virtual event connects investors with 50 leading public biotech, healthcare services, and medical device companies. Presenting company slots are available…Read More

Gilead Partnership Provides Boost to Assembly Bio’s Antiviral Pipeline

Clinical-stage biotech Assembly Biosciences gained a powerful ally in developing next-generation antivirals through a new collaboration with pharma giant Gilead Sciences. The deal provides Gilead access to Assembly Bio’s portfolio of early-stage assets while giving Assembly funding and expertise to advance its programs.

Under the 12-year partnership announced Monday, Gilead will provide $100 million upfront, including an equity investment at a premium. Assembly Bio gains potential milestone payments, royalties, and profit-sharing as programs progress.

For investors, the collaboration validates Assembly Bio’s antiviral pipeline and represents significant long-term revenue potential. The deal also propels Assembly closer to becoming a fully integrated biotech firm.

Assembly’s current clinical assets target major viral diseases like hepatitis B virus (HBV) and herpes simplex virus (HSV). Its preclinical pipeline holds promise against hepatitis D virus (HDV), human cytomegalovirus, and more.

Take a look at other emerging biotechnology companies by taking a moment to look at Noble Capital Markets’ Senior Research Analyst Robert LeBoyer’s coverage list.

Gilead brings extensive experience developing and commercializing leading antiviral drugs in HIV and hepatitis C. The pharma giant now doubles down on virology via Assembly’s early-stage assets.

Opting into a program after proof-of-concept could cost Gilead at least $45 million, signaling confidence in Assembly’s science. The biotech leads R&D initially, with Gilead taking over once assets transition to late-stage trials and commercialization.

For Assembly investors, this deal structure provides valuable de-risking of the pipeline. The company secures funding to advance programs while sharing in the upside if Gilead opts in to lucrative late-stage development and sales.

Assembly is eligible for up to $330 million per program in milestones post opt-in. Royalties range from high single digits to high teens. The biotech can also opt into U.S. profit-sharing.

These economics help offset the risk of clinical failure for Assembly’s shareholders. Meanwhile, Gilead pays for the privilege of accessing Assembly’s innovating antiviral pipelines.

The partnership enhances Assembly’s financial position and extends its operating runway. This enables advancing other preclinical programs beyond the leads Gilead can opt into.

For example, Assembly recently unveiled a promising pan-herpesvirus asset that could treat multiple herpes infections from one oral pill. Such follow-on compounds ensure future revenue potential.

Meanwhile, major progress by Gilead with Assembly’s lead assets could generate substantial royalties and profit-sharing income. Upside from the deal should become clearer as Gilead opts to license drugs entering late-stage testing over the 12-year term.

With a strengthened balance sheet and veteran partner at its side, Assembly Bio seems poised for a breakthrough as a developmental biotech focused on next-gen antivirals.

The Gilead deal provides third-party validation of Assembly’s science and a critical launchpad toward integrated status combining R&D, late-stage trials, and commercialization.

For Assembly investors, these benefits significantly de-risk the journey to having approved antiviral products on the market. If clinical programs pan out as hoped, the payoff from this partnership could be huge.