Gilead to buy CymaBay for $4.3 billion in bets on liver disease treatment
By Bhanvi Satija
(Reuters) -Gilead Sciences has agreed to buy CymaBay Therapeutics for $4.3 billion, gaining access to an experimental liver disease treatment with blockbuster potential as the U.S. drugmaker looks beyond its older HIV drugs for growth.
Shares of the Newark, California-based drug developer jumped 24.6% to a record high of $32.01 in morning trading on Monday, compared to the offer price of $32.50 per share. Gilead's shares rose 1.1% to $74.49.
Gilead will get CymaBay's lead experimental drug, seladelpar, which is estimated to generate sales of $1.9 billion by 2029, if approved, as per LSEG data.
"This transaction helps (Gilead) continue to paint the story for growth beyond their core HIV business," said BMO Capital Markets analyst Evan Seigerman.
The U.S. Food and Drug Administration is reviewing seladelpar as a potential treatment for primary biliary cholangitis, a type of chronic inflammatory liver disease. A decision is expected by Aug. 14.
The deal comes as Gilead has suffered back-to-back setbacks in clinical trials.
Its experimental oral COVID antiviral treatment, obeldesivir, did not meet the main goal in a trial of non-hospitalized patients, while cancer drug Trodelvy failed to significantly improve survival for previously treated patients with a type of lung cancer.
Last week, the U.S. health regulator put a hold on trials testing Gilead's blood cancer drug following increased risk of patient death in some studies.
The company said the deal would complement its portfolio of liver disease drugs, which includes treatments for viral hepatitis.
The transaction, which is expected to close in the first quarter, will be neutral to Gilead's earnings in 2025.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Krishna Chandra Eluri and Sriraj Kalluvila)
