Die cast

14 September 2020 By Robert Cyran Follow @rob_cyran

The $82 bln biotech attracted attention with a Covid-19 drug but has been unable to shake its low valuation multiple. Recent M&A hasn’t helped, either. A $21 bln deal to buy Immunomedics is a huge bet on a breast cancer treatment. Failure could even turn Gilead into a target.

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Gilead Sciences said on Sept. 13 that it had agreed to pay $21 billion in cash, or $88 per share, for Immunomedics. That is a 108% premium, based on Immunomedics' closing share price on Sept. 11, for the biotechnology firm whose drug Trodelvy was approved for sale in April for the treatment of metastatic triple negative breast cancer, a particularly aggressive and difficult form of the disease to treat.

The purchase will be financed out of $15 billion cash on hand and additional new debt.

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