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Astrazeneca, Gilead reportedly eyed merger

Yahoo Finance’s Alexis Christoforous, Brian Sozzi, and Anjalee Khemlani discuss a possible merger between Astrazeneca and Gilead Sciences.

Video Transcript

ALEXIS CHRISTOFOROUS: And as New York City begins to reopen slowly today, all eyes are on a possible vaccine. And two of the most prominent drug makers in the race for that vaccine, AstraZeneca and Gilead Sciences, have reportedly been in talks about a possible merger.

Yahoo Finance's Anjalee Khemlani has more on this. So, Anjalee, important to say these are not formal talks right now between these two companies, but what do we know?

ANJALEE KHEMLANI: That's correct, Alexis. So what we do know is that Bloomberg reported that AstraZeneca did-- which is in the vaccine race with Oxford University's vaccine production-- reached out to Gilead, which is working on a-- or has emergency use for a treatment for the coronavirus. And so what-- that's all we know right now is that there was an approach and that Gilead seems to be uninterested.

Now, the few details we do have is that this came about a month ago, and so that was around the time that Gilead did have, you know, the results of their remdesivir. That all happened last month. So if it fell at a time where Gilead was really on the up and up, that's one of the reasons why a lot of analysts are questioning, you know, that approach where mergers we've often seen is sometimes done when, you know, a company is undergoing long-term distress or just have some sort of issues. This is quite the opposite where we're seeing a very strong Gilead stock right now.

And so that is the level of detail that we have. There have been no comments, you know, about it just yet.

ALEXIS CHRISTOFOROUS: Lets say these two companies do make a formal agreement. Would this raise the red flag with regulators? You know, what would this mean for the greater health-care sector, Anjalee?

ANJALEE KHEMLANI: That is something that remains a question as well as what is the strategic approach? What we do know is that it would represent the largest pharma deal yet. The largest before was Celgene and Bristol Myers Squibb. Right now we have Gilead at around $96 billion market cap and AstraZeneca at $140 billion. So in combined total, that 240 almost would be the largest.

And there are questions about, you know, whether or not there would be political and regulatory pushback from both the US and the UK where Gilead is a US-based company and AstraZeneca in the UK.

ALEXIS CHRISTOFOROUS: All right, Anjalee Khemlani, thank you.

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