Flush with cash, Gilead chasing a mid-range deal like the one that gave it Sovaldi
- After a period of relative quiet regarding its intentions, Gilead has publicly declared its interest in a new acquisition, either a company or assets, likely in a mid-range of around $10 billion to $12 billion. In an interview with the Financial Times, Gilead's chief scientist indicated the biotech firm was primarily interested in products which have already passed the proof-of-concept stage.
- As of September 30, Gilead had $25.1 billion in cash and cash-equivalents available.
- The excess cash comes courtesy of Gilead's renowned hepatitis C franchise, notably the drugs Sovaldi and Harvoni. The two drugs have fueled a banner year for the company, which is on pace to generate around $30 billion in product sales this year.
Given the relative dearth of desirable targets for Gilead at this point in the M&A game, analysts see two companies which may make sense for Gilead to acquire—Vertex Pharmaceuticals, maker of Kalydeco and Orkambi, and Incyte, which specializes in cancer and inflammation-related disorders.
Any acquisition from Gilead will likely be compared to the $11 billion deal for Pharmasset that Gilead struck in 2011. As part of the deal, Gilead also gained access to the hep C candidates which eventually became Solvadi and Harvoni. The deal made the biotech a first-in-class contributor in an area with a serious unmet medical need.
With $25 billion cash in hand, Gilead has the opportunity to expand its market-reach and explore adjacent product areas, particularly in the oncology space where the company doesn't have an outsized footprint.
- Financial Times Cash-rich Gilead hits acquisition trail