GILD Stock 1% Down in Pre-market, Gilead Sciences Inks $21 Billion Acquisition Deal with Immunomedics

UTC by Godfrey Benjamin · 3 min read
GILD Stock 1% Down in Pre-market, Gilead Sciences Inks $21 Billion Acquisition Deal with Immunomedics
Photo: Depositphotos

Since the Gilead acquisition announcement was published, investors have gone extremely bullish on the shares of Immunomedics.

Foremost drugmaker Gilead Sciences Inc (NASDAQ: GILD) has inked a $21 billion acquisition deal with Immunomedics Inc (NASDAQ: IMMU). The acquisition will reinforce Gilead Science’s (GILD) influence in the field of cancer treatments as the company will have access to Immunomedics novel drug Trodelvy. Trodelvy is a first-in-class Trop-2 directed antibody-drug conjugate (ADC) that was granted accelerated approval by the U.S. Food and Drug Administration (FDA) in April for the treatment of adult patients with metastatic triple-negative breast cancer.

Per the announcement from the two firms, the deal is estimated to be worth $21 billion and will see Gilead Sciences (GILD) pay $88 per share in cash which accounts for a premium of about 108% over Immunomedics’ shares last closing price of $42.25 on Sept 11. The deal which is billed to close in the fourth quarter of 2020 will be financed by $15 billion in cash on hand and $6 billion in newly issued debt.

Since the Gilead acquisition announcement went off, investors have gone extremely bullish on the shares of Immunomedics. The shares have risen by over 106% in the pre-market, adding $45 to close its price at $87.25, a few cents below the $88 Gilead is expected to pay for it. However, GILD stock is 1.34% down today in teh pre-market after closing with a 2.84% rise, at $65.58, on Friday.

Gilead Takeover of Immunomedics, Cancer Patients the Final Beneficiary

The takeover of Immunomedics by Gilead has been touted as a move to bring key cancer treatment drugs to needing patients worldwide. Trodelvy, the flagship drug in this partnership is being studied as both a monotherapy and in combination with checkpoint inhibitors and other non-immuno-oncology products by Immunomedics and independent investigators.

“This acquisition represents significant progress in Gilead’s work to build a strong and diverse oncology portfolio. Trodelvy is an approved, transformational medicine for a form of cancer that is particularly challenging to treat. We will now continue to explore its potential to treat many other types of cancer, both as a monotherapy and in combination with other treatments,” said Daniel O’Day, Chairman, and Chief Executive Officer, Gilead Sciences. “We look forward to welcoming the talented Immunomedics team to Gilead so we can continue to advance this important new medicine for the benefit of patients with cancer worldwide.”

According to Behzad Aghazadeh, Ph.D., Executive Chairman of Immunomedics, the partnership will help the company accelerate its processes in improving cancer patient’s health. Per his words:

“We are very pleased that Gilead recognized the value of Trodelvy – both for the important role it has already begun to play for patients with metastatic triple-negative breast cancer and for its potential to help many other patients with cancer in the future. We are excited for the opportunities ahead of us as we join with Gilead to advance our shared mission in defeating cancer. By working with Gilead, we have the opportunity to accelerate our progress and improve care for patients in need of new therapies.”

Gilead Sciences has been upfront in the market in recent times following the Food and Drug Administration’s Emergency Use Authorization granted to its antiretroviral drug Remdesivir known to reduce the risk of deaths among COVID-19 patients.

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