In a bid to expand its oncology pipeline, biopharmaceutical
Gilead Sciences Inc.
) inked a definitive agreement to buy a Canada-based drug
YM BioSciences Inc.
) for $2.95 per share. The all-cash deal, already cleared by the
Board of Directors at YM BioSciences, is worth approximately $510
The closure of the deal is dependant on the approval of the
stockholders of YM BioSciences along with the satisfaction of
certain other customary conditions. Gilead expects to close the
acquisition in the first quarter of 2013. The offer price of
$2.95 per share represents a premium of 81% over YM BioSciences'
closing price of $1.63 on December 11 2012.
As per the terms of the deal, each shareholder of YM BioSciences
will be eligible to receive $2.95 for each share in cash.
Moreover, holders of warrants and stock options will be eligible
to receive the difference between the offer price of the deal and
the exercise price of the warrant or stock option in cash.
On completion of the deal, Gilead's oncology pipeline will be
strengthened by the addition of CYT387, which is YM BioSciences'
lead candidate. CYT387 has completed phase I/II studies for the
myelofibrosis indication. The candidate is expected to be moved
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, once the candidate becomes part of its
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.
We currently have a long-term Neutral recommendation on Gilead.
The stock carries a Zacks #3 Rank (Hold) in the short run.
Another biopharmaceutical company,
Questcor Pharmaceuticals, Inc.
) carries a Zacks #2 Rank (Buy) in the short run.
We have a Neutral stance on YM BioSciences. The stock carries a
Zacks #2 Rank (Buy) in the short run.
GILEAD SCIENCES (GILD): Free Stock Analysis
QUESTCOR PHARMA (QCOR): Free Stock Analysis
YM BIOSCI INC (YMI): Free Stock Analysis
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