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Analyst Blog

Recently, Gilead Sciences, Inc. (GILD - Analyst Report) completed its acquisition of Canada-based drug development company, YM BioSciences Inc. for $2.95 per share. Through this acquisition, Gilead aims to strengthen its oncology pipeline.

Following the closure of the deal, YM BioSciences has become a wholly-owned subsidiary of Gilead. As per the terms of the deal, each shareholder of YM BioSciences is entitled to receive $2.95 for each share in cash. Moreover, holders of warrants and stock options are entitled to get the difference between the offer price of the deal and the exercise price of the warrant or stock option in cash.

Gilead’s oncology pipeline has been strengthened by the addition of CYT387, the erstwhile YM BioSciences’ lead candidate. CYT387 has completed phase I/II studies for the myelofibrosis indication.

At the time of announcing the deal in Dec 2012, Gilead had stated that it intends to move the candidate into phase III studies for the same indication in the second half of 2013. Gilead intends to evaluate CYT387 in other oncology indications as well.

Currently, the lead oncology candidate at Gilead is idelalisib (formerly GS-1101). The candidate, added to Gilead’s pipeline through its 2011 acquisition of Calistoga Pharmaceuticals, is under development for the chronic lymphocytic leukemia and indolent non-Hodgkin’s lymphoma indications.

Another oncology candidate at Gilead is simtuzumab (formerly GS- 6624). The candidate, added to Gilead’s pipeline through its 2010 acquisition of Arresto Biosciences, is being evaluated in multiple oncology indications.

Gilead, a biopharmaceutical company, currently carries a Zacks Rank #3 (Hold). Biopharma stocks, such as Peregrine Pharmaceuticals, Inc. (PPHM - Snapshot Report), Medivation, Inc. (MDVN - Analyst Report) and Targacept, Inc. (TRGT - Snapshot Report) are favorably placed at the current level. While Peregrine Pharma and Medivation carry a Zacks Rank #2 (Buy), Targacept carries a Zacks Rank #1 (Strong Buy).

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