Gilead acquires Forty Seven for $4.9bn as it eyes expansion into cancer treatment

The deal with Forty Seven complements Gilead's 2017 acquisition of Kite Pharma

Gilead Sciences is buying cancer treatment company Forty Seven in a deal valued at approximately $4.9 billion. AP

Gilead Sciences agreed to buy Forty Seven for about $4.9 billion (Dh17.9bn) to advance into one of the hottest areas of pharmaceutical research: cancer treatments that harness the immune system to fight tumours.

Gilead will acquire Forty Seven for $95.50 per share in cash in a transaction cleared by both boards, the US-based company said in a statement on Monday. The price is a 96 per cent premium to Forty Seven’s closing price on Thursday, before Bloomberg broke the news of Gilead’s approach. Forty Seven’s shares rose 61 per cent to $93.51 in trading before the market opened in New York.

Gilead’s hepatitis C products turned the company into a pharma industry giant, but sales of the drugs have slipped from their peak and it has struggled to find new streams of revenue. The deal with Forty Seven complements the 2017 acquisition of Kite Pharma, bringing an experimental therapy that has potential to be the first in its class, said chief executive Daniel O’Day.

O’Day took the reins last March, saying one of his top priorities was to bolster Gilead’s drug pipeline.

Forty Seven received interest from other potential suitors, Bloomberg reported last week.

The company’s experimental medicine, called magrolimab, is a monoclonal antibody in early studies for several cancers affecting the blood and lymph nodes, including acute myeloid leukemia and diffuse large B-cell lymphoma.

The therapy targets a “do-not-eat-me” signal that allows cancer cells to avoid destruction. The drug blocks the signal, allowing the patient’s own immune system to engulf and eradicate the malignant cells.

Forty Seven also has two experimental medicines that may soon enter clinical tests, including an antibody that could be combined with magrolimab.

Citigroup and JPMorgan Chase acted as joint financial advisers to Gilead. Centerview Partners is acting as the Forty Seven’s financial adviser. Skadden, Arps, Slate, Meagher & Flom served as Gilead’s legal counsel and Cooley did the same for Forty Seven.