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Gilead to Buy Immuno-Oncology Company Forty Seven for $4.9B

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Gilead Sciences, Inc. GILD will acquire a clinical-stage immuno-oncology company, Forty Seven, Inc. FTSV, for $95.50 per share in cash or approximately $4.9 billion.

The acquisition will add Forty Seven’s investigational lead product candidate, magrolimab, to Gilead’s immuno-oncology research and development portfolio.

Magrolimab is a monoclonal antibody in clinical development for the treatment of several cancers, including myelodysplastic syndrome (MDS), acute myeloid leukemia (AML) and diffuse large B-cell lymphoma (DLBCL), for which new, transformative medicines are urgently needed.

Magrolimab has been granted Orphan Drug designation by the FDA for the treatment of MDS and AML and by the European Medicines Agency for the treatment of AML. The candidate has also been granted Fast Track designation by the FDA for the treatment of MDS, AML, relapsed or refractory DLBCL and follicular lymphoma, and two types of B-cell NHL.

The acquisition, expected to close in the second quarter of 2020, should bolster Gilead’s efforts to develop its oncology portfolio.

Additional studies are ongoing in non-Hodgkin lymphoma (NHL) and solid tumors.

We note that the massive decline in sales of the HCV franchise has propelled Gilead to focus on the HIV franchise, CAR T therapy and other newer avenues. The rapid adoption of Biktarvy propels the HIV business amid stiff competition from the likes of GlaxoSmithKline GSK.

Gilead’s Yescarta was the first CAR T cell therapy approved by the FDA for the treatment of adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including DLBCL not otherwise specified, primary mediastinal large B-cell lymphoma, high-grade B-cell lymphoma and DLBCL arising from follicular lymphoma.

Gilead’s stock has gained 15.2% in the past year against the industry's decline of 7.7%.

However, the uptake of Yescarta has not been per expectations, given the exorbitant cost and competition from Novartis’ NVS Kymriah. Hence, the company is making efforts to diversify its portfolio.

Gilead currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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