Gilead to Buy YM BioSciences - Analyst Blog
December 13 2012 - 3:10AM
Zacks
In a bid to expand its oncology
pipeline, biopharmaceutical company Gilead Sciences
Inc. (GILD) inked a definitive agreement to buy a
Canada-based drug development company, YM BioSciences
Inc. (YMI) for $2.95 per share. The all-cash deal, already
cleared by the Board of Directors at YM BioSciences, is worth
approximately $510 million.
The closure of the deal is dependant on the approval of the
stockholders of YM BioSciences along with the satisfaction of
certain other customary conditions. Gilead expects to close the
acquisition in the first quarter of 2013. The offer price of $2.95
per share represents a premium of 81% over YM BioSciences’ closing
price of $1.63 on December 11 2012.
As per the terms of the deal, each shareholder of YM BioSciences
will be eligible to receive $2.95 for each share in cash. Moreover,
holders of warrants and stock options will be eligible to receive
the difference between the offer price of the deal and the exercise
price of the warrant or stock option in cash.
On completion of the deal, Gilead’s oncology pipeline will be
strengthened by the addition of CYT387, which is YM BioSciences’
lead candidate. CYT387 has completed phase I/II studies for the
myelofibrosis indication. The candidate is expected to be moved
into phase III studies for the same indication in the second half
of 2013. Gilead intends to evaluate CYT387 in other oncology
indications as well, once the candidate becomes part of its
pipeline.
Currently, the lead oncology candidate at Gilead is idelalisib
(formerly GS-1101). The candidate, added to Gilead’s pipeline
through its 2011 acquisition of Calistoga Pharmaceuticals, is under
development for the chronic lymphocytic leukemia and indolent
non-Hodgkin’s lymphoma indications. Another oncology candidate at
Gilead is simtuzumab (formerly GS- 6624). The candidate, added to
Gilead’s pipeline through its 2010 acquisition of Arresto
Biosciences, is being evaluated in multiple oncology
indications.
Our Recommendation
We currently have a long-term Neutral recommendation on Gilead. The
stock carries a Zacks #3 Rank (Hold) in the short run. Another
biopharmaceutical company, Questcor Pharmaceuticals,
Inc. (QCOR) carries a Zacks #2 Rank (Buy) in the short
run.
We have a Neutral stance on YM BioSciences. The stock carries a
Zacks #2 Rank (Buy) in the short run.
GILEAD SCIENCES (GILD): Free Stock Analysis Report
QUESTCOR PHARMA (QCOR): Free Stock Analysis Report
YM BIOSCI INC (YMI): Free Stock Analysis Report
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