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2020-03-02| M&A

Gilead Strikes US$ 4.9B Takeover Deal of Forty Seven

by Rajaneesh K. Gopinath
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Today, Gilead Sciences and immuno-oncology company, Forty Seven announced their definitive agreement according to which the latter will be acquired for a whopping US$ 4.9 billion with all outstanding shares priced at $95.50 apiece. With this all-cash deal, Gilead aims to strengthen its oncology R&D portfolio. The transaction is expected to be completed in the second quarter of 2020 if all conditions including regulatory authorizations are met. “This agreement builds on Gilead’s presence in immuno-oncology and adds significant potential to our clinical pipeline,” said Daniel O’Day, Chairman, and CEO of Gilead Sciences.

 

The Rise of Forty Seven’s Stock Price

For a company that reported consecutive loss per share in the second and third quarters last year, Forty Seven would be mighty pleased today to have Gilead pay almost a 65% premium on the stock price of $58 when trading closed last Friday. The turnaround in stock market fortunes started late last year, all thanks to the strong showing of its lead experimental drug candidate, magrolimab in Phase 1b trials. The trial included 24 patients with untreated high-risk myelodysplastic syndrome (MDS) and 22 patients with untreated acute myeloid leukemia (AML) who were unsuitable for chemotherapy. The results showed an overall response rate (ORR) of 92% and 64% in high-risk MDS and untreated AML respectively.

The stock prices doubled when Forty Seven announced the trial results at the American Society of Hematology Annual Meeting last December. The news of Gilead’s interest in acquiring Forty Seven further increased its value and since the official announcement, the stocks have skyrocketed with a price of $93.91 per share when markets closed at 4:00 pm ET today. “We are pleased to join Gilead and believe that by combining our scientific expertise with Gilead’s strength in developing treatments that modify the immune system, we will be able to more rapidly advance our therapies,” said Mark McCamish, MD, Ph.D., President and CEO of Forty Seven.

 

Magrolimab, CD47 and Cancer Evasion

Magrolimab is a monoclonal antibody drug that targets the CD47 receptor. It was developed in the laboratory of Forty Seven’s co-founder Irving Weissman, MD, Director of Stanford University’s Institute for Stem Cell Biology and Regenerative Medicine. Cancer cells evade the cell’s defense via passing the “don’t eat me” signal to the innate immune system through CD47, a protein that is overexpressed in almost all cancer cells. The research team from Stanford had originally demonstrated how CD47 binds to signal regulatory protein α (SIRPα) on the surface of macrophages, inhibiting their ability to kill cancer cells.

 

Busy Times Ahead for Gilead

Gilead Sciences has been a leader in developing antiretroviral therapy for HIV/AIDS. Along with Bristol-Myers Squibb and Janssen, it is currently battling an antitrust lawsuit that alleges its involvement in monopolizing HIV treatment through a one pill combination regimen. Also, presently its Ebola drug remdesivir is being tested in clinical trials as a weapon against COVID-19, a potential pandemic that is wreaking havoc across the world.

Gilead has been focusing on bolstering its oncology pipeline for quite some time now. In 2017, it acquired Kite Pharma for $11.9 billion to enter the autologous cell immunotherapy space comprising of CAR T cells. Gilead’s interest in acquiring Forty Seven is understandable since Magrolimab targets macrophages, the other major immune cell, and is currently being evaluated for several indications. It has been granted Fast Track designation by the FDA for the treatment of MDS and AML and for the treatment of relapsed or refractory diffuse large B-cell lymphoma (DLBCL) and follicular lymphoma. It has also been granted Orphan Drug designation by the FDA and European Medicines Agency for the treatment of AML.

Magrolimab complements our existing work in hematology, adding a non-cell therapy program that complements Kite’s pipeline of cell therapies for hematological cancers. With a profile that lends itself to combination therapies, magrolimab could potentially have transformative benefits for a range of tumor types. We are looking forward to working with the highly experienced team at Forty Seven to help patients with some of the most challenging forms of cancer” said Daniel O’Day.

Related Article: Fight against COVID-19 Strengthens as Gilead Launches Phase III Trial for Remdesivir

References
  1. https://www.gilead.com/news-and-press/press-room/press-releases/2020/3/gilead-to-acquire-forty-seven-for-49-billion
  2. https://ir.fortyseveninc.com/news-releases/news-release-details/gilead-acquire-forty-seven-49-billion
  3. https://ir.fortyseveninc.com/news-releases/news-release-details/forty-seven-inc-announces-updated-data-ongoing-clinical-trial
  4. https://www.nasdaq.com/market-activity/stocks/ftsv
  5. https://www.frontiersin.org/articles/10.3389/fonc.2019.01380/full
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