Gilead Sciences said Monday it will acquire biotech firm Kite Pharma for $11.9 billion in a major bet that cell therapy will become “the cornerstone” of treating cancer.
Kite is one of several companies developing a treatment that reprograms disease-fighting T-cells to seek and destroy abnormal, cancerous lymph cells without harming healthy cells. The U.S. Food and Drug Administration is expected to decide in November whether to approve Kite’s CAR-T therapy for treating non-Hodgkin lymphoma.
Gilead, which is making a push into oncology as sales of its hepatitis C drugs decline, has agreed to pay $180 in cash for Kite, a 29% premium over the Friday closing price.
“The acquisition of Kite establishes Gilead as a leader in cellular therapy and provides a foundation from which to drive continued innovation for people with advanced cancers,” Gilead CEO John F. Milligan said in a news release.
“We are greatly impressed with the Kite team and what they have accomplished, and share their belief that cell therapy will be the cornerstone of treating cancer,” he added.
In study results released by Kite in February, more than a third of very sick lymphoma patients showed no signs of the disease six months after a single CAR-T treatment and 82% of patients had their cancer shrink at least by half at some point after the treatment.
Kite faces competition from Novartis, Juno Therapeutics, and Bluebird Bio. But Gilead was reportedly impressed by Kite’s trial data.
“Gilead is a very patient, diligent party when it comes to looking at strategic transactions,” a person familiar with the matter told Business Insider. “The primary thing was just the clinical data and the success that Kite has had developing the program.”
Sales of Gilead’s hepatitis C drugs fell to $2.9 billion in the second quarter from $4 billion a year earlier. Last year, the company generated total sales of $30.39 billion, of which $14.8 billion came from hep C treatments.
“Wall Street and Gilead shareholders have long been expecting Gilead to use its cash pile for a big-ticket acquisition,” Reuters noted.