Gilead made plenty of headlines in 2020 with the development of Remdesivir, the COVID-19 drug that achieved an emergency use authorization and was available in hospitals beginning in July. The company has long been a leader in anti-viral therapies and is best known for their work with HIV and Hepatitis C. Now Gilead is expanding its reach past anti-viral therapies and delving into cancer treatments.
The California company recently acquired biotech Immunomedics for $88 per share. The transaction will result in a $21 billion purchase, expected to close in the fourth quarter of 2020. The total amount will be offered via $15 billion cash on hand and an additional $6 billion in newly issued debt. Immunomedics shares nearly doubled this year, giving the company a value of nearly $10 billion.
Immunomedics sells Trodelvy, an FDA-approved drug used to treat metastatic triple-negative breast cancer, a particularly aggressive form of the disease. Trodelvy has been shown to cut disease progression 59% more effectively than chemotherapy for patients who failed at least two chemotherapy treatments. The drug also reduced the risk of death by 52%, which is a massive gain in the fight against metastatic breast cancer. The drug has also been shown to be effective in use against bladder cancer.
The cancer drug industry is currently one of the hottest and most lucrative corners of pharma, and the acquisition of Immunomedics should help Gilead recover from the slumps it experienced towards the beginning of the year. While Gilead has a few of its own cancer-related projects in the pipeline, Trodelvy will be the first of its market-ready cancer therapies.
"It's allowing us to fast forward the work we've done over the past several years in developing a true franchise and portfolio in cancer, and it's really not complete until you have a marketed product," said Gilead Chief Executive Daniel O’Day.
Cancer treatment drugs are a $157 billion market and currently one of the most dynamic in the biotech and pharmaceutical industries. With increased understanding of how many cancers operate, drug makers are rushing to develop new effective treatments. With Immunomedics, Gilead’s cancer portfolio can make strides to keep up with big-name cancer treatment producers like Pfizer, AstraZeneca, Novartis, and GlaxoSmithKline.