Over the weekend Gilead announced that it has agreed to purchase cancer-drug company Immunomedics for $21 billion.
Shares of Immunomedics, which sells Trodelvy, a drug used to treat different forms of breast cancer, were exploding on Monday as the market re-opened. The stock soared as much as 106%.
Trodelvy is also being evaluated for a number of other potential cancer indications. The drug was approved by the FDA in April and registered $20 million in sales in its first two months on the market.
Gilead said that it expects the deal to immediately bolster its revenue growth, and for it to be neutral to accretive to adjusted earnings per share in 2023 and “significantly accretive thereafter.”
“This acquisition represents significant progress in Gilead’s work to build a strong and diverse oncology portfolio. Trodelvy is an approved, transformational medicine for a form of cancer that is particularly challenging to treat. We will now continue to explore its potential to treat many other types of cancer, both as a monotherapy and in combination with other treatments,” said Daniel O’Day, Chairman and Chief Executive Officer, Gilead Sciences.
“We look forward to welcoming the talented Immunomedics team to Gilead so we can continue to advance this important new medicine for the benefit of patients with cancer worldwide.”
The acquisition will be funded through $15 billion in cash on hand, as well as $6 billion in newly issued debt.
“We are very pleased that Gilead recognized the value of Trodelvy – both for the important role it has already begun to play for patients with metastatic triple-negative breast cancer and for its potential to help many other patients with cancer in the future,” said Behzad Aghazadeh, PhD, Executive Chairman of Immunomedics.
“We are excited for the opportunities ahead of us as we join with Gilead to advance our shared mission in defeating cancer. By working with Gilead, we have the opportunity to accelerate our progress and improve care for patients in need of new therapies.”
The deal was approved by the boards of both companies and is expected to close in the fourth quarter of 2020.
Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.