Gilead to Acquire Kite Pharma for $11.9 Billion in Immunotherapy Deal

Biopharmaceutical company Gilead Sciences announced on Monday that it would be buying cancer immunotherapy business Kite Pharma in a deal worth $11.9 billion. The all-cash deal values Kite Pharma’s shares at $180 apiece.

Kite Pharma is a biopharmaceutical company focused on developing novel immunotherapies for cancer treatment. Specifically, their CAR-T cell immunotherapies engineer a patient’s own immune cells to allow them to recognize and destroy tumor tissue.

The company’s lead candidate – axicabtagene ciloleucel (axi-cel) – has been granted priority review status by the US Food and Drug Administration (FDA). The regulatory agency expects to have a decision for Kite by the end of November, which could make the drug the first CAR-T cell immunotherapy used to treat non-Hodgkin lymphoma.

Axicabtagene ciloleucel is also under review by the European Medicines Agency (EMA), with approval expected in 2018. Kite’s pipeline also includes candidates for other blood cancers, as well as solid tumors which have been traditionally harder to treat with immunotherapy.

“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,” said Dr. John F. Milligan, Gilead’s President and Chief Executive Officer. “The field of cell therapy has advanced very quickly, to the point where the science and technology have opened a clear path toward a potential cure for patients.”

Novartis, Juno Therapeutics and Bluebird Bio are all competing CAR-T developers, though some have seen safety issues with their candidates. In 2016, a leukemia clinical trial sponsored by Juno Therapeutics was suspended following the death of four patients participating in the study.

Fludarabine, a chemotherapy drug given to patients before the CAR-T cells were administered, was believed to be involved in the death of the patients, however the safety of Juno’s immunotherapy was called into question. Kite Pharma later used a lower dose of the chemotherapy agent in their ROCKET clinical trial.

“From the release of our pivotal data for axi-cel, to our potential approval by the FDA, this is a year of milestones. We are excited that Gilead, one of the most innovative companies in the industry, recognized this value and shares our passion for developing cutting-edge and potentially curative therapies for patients,” said Dr. Arie Belldegrun Chairman, President and Chief Executive Officer of Kite. “CAR-T has the potential to become one of the most powerful anti-cancer agents for hematologic cancers. With Gilead’s expertise and support, we hope to fulfill that potential by rapidly accelerating our robust pipeline and next-generation research and manufacturing technologies for the benefit of patients around the world.”

The Boards of Directors at both Gilead and Kite have approved the acquisition, and the companies expect the deal to be completed in Q4 2017. Earnings are anticipated to increase after the year 2020, with neutral earnings expected in the next three years.