Div­ing deep in­to CAR-T, Gilead forges $12B buy­out deal for Kite Phar­ma

Gilead has forged the big, trans­for­ma­tion­al buy­out deal that every­one in the in­dus­try has been wait­ing for.

Gilead $GILD has agreed to buy CAR-T pi­o­neer Kite Phar­ma $KITE — which is like­ly just months away from its first ap­proval — for $11.9 bil­lion in cash.

The buy­out will in­stant­ly make Gilead a leader in adop­tive cell ther­a­py, go­ing head-to-head against No­var­tis’ lead­ing ef­fort with CTL019. And in a call with an­a­lysts ear­ly Mon­day, Gilead ex­ecs un­der­scored that while cell ther­a­pies would be­come the cor­ner­stone of their work in on­col­o­gy, the busi­ness de­vel­op­ment team is pur­su­ing more pacts to build that seg­ment of the pipeline.

Gilead agreed to forge the deal at a price of $180 a share, a rel­a­tive­ly mod­est 29% pre­mi­um of the com­pa­ny’s al­ready swollen share price. Just three years ago, though, Kite went pub­lic with an IPO that ini­tial­ly priced at $17 a share. The buy­out price rep­re­sents a 960% in­crease on that.

The biggest sin­gle ben­e­fi­cia­ry of the buy­out will be Kite CEO Arie Bellde­grun, whose 5.9% stake in Kite — list­ed in the lat­est avail­able proxy state­ment — is to­day worth $597,706,380.

Arie Bellde­grun

Kite’s lead­ing drug is axi-cel, which comes with a peak sales es­ti­mate hov­er­ing close to $2 bil­lion a year. But the com­pa­ny has al­so been ac­tive­ly work­ing on a slate of next-gen can­cer ther­a­pies that promise to move be­yond the ini­tial re-en­gi­neer­ing work with chimeric anti­gen re­cep­tors in an ef­fort to move be­yond blood can­cers and in­to sol­id tu­mors.

For Gilead, it’s a chance to forge a new busi­ness that can be re­li­ably lined up next to its foun­da­tion­al work in HIV, where it con­tin­ues to be an in­dus­try leader. Gilead paid $11 bil­lion for Phar­mas­set to break in­to the hep C mar­ket. The com­pa­ny ac­com­plished that task with fly­ing col­ors, but af­ter watch­ing sales swell in­to megablock­buster ter­ri­to­ry, rev­enue has peaked and is ex­pect­ed to slide in com­ing years.

That com­bi­na­tion of fi­nan­cial fire­pow­er — Gilead can eas­i­ly fund this deal re­ly­ing on its cash re­serves — and a need to build the busi­ness put Gilead in a per­fect spot to ac­quire Kite just as the biotech neared a ma­jor cross­road.

For Kite CEO Bellde­grun, the buy­out marks the end of a ma­jor dri­ve to cre­ate a com­pa­ny that could de­vel­op and mar­ket a per­son­al­ized cell ther­a­py. Kite has worked close­ly with the NCI’s Steven Rosen­berg, the sci­en­tist who helped pi­o­neer CAR-T ther­a­pies.

This ac­qui­si­tion al­so has some im­pli­ca­tions for the in­dus­try. M&A has been lack­ing so far in 2017, with big play­ers like Pfiz­er hold­ing back in an­tic­i­pa­tion of tax re­form leg­is­la­tion that would al­low them to move bil­lions from over­seas ac­counts. Gilead CEO Mil­li­gan, though, has con­sis­tent­ly main­tained that to run a bio­phar­ma com­pa­ny prop­er­ly, you need to ig­nore what’s go­ing on in Wash­ing­ton and make de­ci­sions. He may in­spire oth­ers to fol­low suit, oil­ing the tracks on more deals.

John Mil­li­gan, Gilead CEO

“The ac­qui­si­tion of Kite es­tab­lish­es Gilead as a leader in cel­lu­lar ther­a­py and pro­vides a foun­da­tion from which to dri­ve con­tin­ued in­no­va­tion for peo­ple with ad­vanced can­cers,” said John Mil­li­gan, Gilead’s pres­i­dent and CEO. “The field of cell ther­a­py has ad­vanced very quick­ly, to the point where the sci­ence and tech­nol­o­gy have opened a clear path to­ward a po­ten­tial cure for pa­tients. We are great­ly im­pressed with the Kite team and what they have ac­com­plished, and share their be­lief that cell ther­a­py will be the cor­ner­stone of treat­ing can­cer. Our sim­i­lar cul­tures and his­to­ries of dri­ving rapid in­no­va­tion in or­der to bring more ef­fec­tive and safer prod­ucts to as many pa­tients as pos­si­ble make this an ex­cel­lent strate­gic fit.”

The Big Phar­ma dis­card pile; Lay­offs all around while some biotechs bid farewell; New Roche CEO as­sem­bles top team; and more

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With earnings seasons in full swing, we’ve listened in on all the calls so you don’t have to. But news is popping up from all corners, so make sure you check out our other updates, too.

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Raymond Stevens, Structure Therapeutics CEO

Be­hind Fri­day's $161M IPO: A star sci­en­tist, GPCR drug dis­cov­ery and a plan to chal­lenge phar­ma in di­a­betes

What does it take to pull off a $161 million biotech IPO these days?

In Structure Therapeutics’ case, it means having a star scientist co-founder paired with the computational drug discovery company Schrödinger, $198 million in private funding from blue-chip investors, almost six years of research work on G protein-coupled receptors and a slate of oral, small-molecule drugs, with an eye on the huge and growing diabetes and weight-loss market.

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Sen. Ron Wyden (D-OR) (Francis Chung/E&E News/Politico via AP Images)

In­fla­tion re­bates in­com­ing: Wyden calls on CMS to move quick­ly as No­var­tis CEO pledges re­ver­sal

Senate Finance Chair Ron Wyden (D-OR) this week sent a letter to the head of the Centers for Medicare & Medicaid Services seeking an update on how and when new inflation-linked rebates will take effect for drugs that see major price spikes.

The newly signed Inflation Reduction Act requires manufacturers to pay a rebate to Medicare when they increase drug prices faster than the rate of inflation.

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Trodelvy notch­es a win in most com­mon form of breast can­cer

Following a promise last year to go “big and fast in breast cancer,” Gilead has secured a win for Trodelvy in the most common form.

The drug was approved to treat HR-positive, HER2-negative breast cancer patients who’ve already received endocrine-based therapy and at least two other systemic therapies for metastatic cancer, Gilead announced on Friday.

Trodelvy won its first indication in metastatic triple-negative breast cancer back in 2020, and has since added urothelial cancer to the list. HR-positive HER2-negative breast cancer accounts for roughly 70% of new breast cancer cases worldwide per year, according to senior VP of oncology clinical development Bill Grossman, and many patients develop resistance to endocrine-based therapies or worsen on chemotherapy.

Af­ter 13 years, Ramy Mah­moud steps in­to CEO seat at Opti­nose; Ru­pert Vessey set to ex­it Bris­tol My­ers in Ju­ly

After 13 years as president and COO at Optinose, Ramy Mahmoud has stepped into a new role as its CEO. He is taking the place of Peter Miller, who stepped down earlier this week, though Miller is still staying with the company as a consultant.

In 2010, the two business partners joined Optinose to take it in a new direction, transforming it from a delivery platform to product company. They previously worked together at Johnson & Johnson, when Miller was president at Janssen and Mahmoud headed medical affairs. Miller said after he learned about Optinose, “I did what I always do, which is find people smarter than me to talk with about the idea. And the first person I called was Ramy … and I said, ‘Hey, Ramy, what do you think of this technology?’”

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Ma­gen­ta halts stem cell work and may sell it­self fol­low­ing pa­tient death, clin­i­cal hold

Magenta Therapeutics said it is halting work on its stem cell transplant drug pipeline and may sell itself, a week after the company reported the death of a patient in an early stage trial of its antibody-drug conjugate.

The Cambridge, MA-based company said it will conduct a “review of strategic alternatives,” and that could include an “acquisition, merger, business combination, or other transaction.”

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Goldfinch Bio CEO Tony Johnson (L) and Karuna Therapeutics CEO Bill Meury

Karuna li­cens­es Goldfinch as­sets to com­pete with Boehringer In­gel­heim in neu­ro­science

Karuna Therapeutics is looking to compete with Boehringer Ingelheim on depression and anxiety with a new license to Goldfinch Bio’s assets, starting with $15 million to the shuttered biotech.

Karuna steps into an arena already being tested by Boehringer in multiple Phase II studies — the two are targeting transient receptor potential canonical 4 and 5, or TRPC4/5, which is thought to have a role in neuroscience indications. Goldfinch’s asset went through a Phase II in kidney diseases, but Karuna’s sights are set on mood and anxiety disorders for now.

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Te­va drops out of in­dus­try trade group PhRMA

Following in AbbVie’s footsteps, Teva confirmed on Friday that it’s dropping out of the industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA).

Teva didn’t give a reason for its decision to leave, saying only in a statement to Endpoints News that it annually reviews “effectiveness and value of engagements, consultants and memberships to ensure our investments are properly seated.”

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Sanofi CFO Jean-Baptiste de Chatillon (L) and CEO Paul Hudson (Romuald Meigneux/Sipa via AP Images)

Sanofi sees downtick in flu sales as it preps for launch of RSV an­ti­body

Sanofi expects its RSV antibody jointly developed with AstraZeneca will be available next season, executive VP of vaccines Thomas Triomphe announced on the company’s quarterly call.

Beyfortus, also known as nirsevimab, was approved in the EU back in November and is currently under FDA review with an expected decision coming in the third quarter of this year. The news comes as the FDA plans to hold advisory committee meetings over the next couple months to review RSV vaccines from Pfizer and GSK.