Gilead bags blood disorder drug with YM BioSciences buy

Wed Dec 12, 2012 5:56pm EST
 

(Reuters) - Gilead Sciences Inc said it would buy Canada's YM BioSciences Inc for about $510 million in cash, getting access to a second experimental drug to treat a rare blood and immune cell disorder.

Gilead shares closed down 0.14 percent at $76.23 on the Nasdaq, while YM's U.S.-listed shares closed up 77 percent at $2.88, just under Gilead's offer price.

YM's only drug, codenamed CYT387, is being tested in patients with myelofibrosis, a blood disorder with limited treatment options.

Gilead, which is conducting mid-stage trials of its own drug for the disorder, said it will begin a pivotal late-stage clinical trial of CYT387 in the second half of 2013.

Shares of Incyte Corp, which sells the only approved drug to treat myelofibrosis, closed down 6 percent at $16.75 on news of Gilead's deal with YM.

Incyte received $43.7 million from the sale of the drug, Jakafi, in the United States during July-September.

YM took hold of CYT387 with its acquisition of the Australian biopharmaceutical company Cytopia Ltd in 2010.

"It's a good outcome for YM because they bought the product for a relatively modest amount, and a good fit for Gilead's strategy of broadening its portfolio particularly in oncology," Edison Investment Research analyst Christian Glennie said.

Gilead said it will pay $2.95 per YM share and that it plans to fund the acquisition with cash on hand. The deal would be valued at about $465 million based on YM's outstanding shares, excluding options.   Continued...