In an attempt to treat liver illness, Gilead buys CymaBay for $4.3 billion

Gilead Sciences has agreed to purchase CymaBay Therapeutics for $4.3 billion, aiming to acquire an experimental liver disease treatment with significant potential for success as the U.S. pharmaceutical company seeks growth avenues beyond its established HIV drug portfolio. The acquisition marks a strategic move for Gilead as it diversifies its offerings.

Gilead Sciences Inc. is a biopharmaceutical business involved in researching, developing, and marketing medications for treating cancer, inflammatory conditions, and hematological and respiratory disorders. The company collaborates with leading worldwide pharmaceutical companies, academic institutions, and medical research centers to create novel medications.

CymaBay is a clinical-stage biopharmaceutical business focusing on creating treatments for metabolic diseases with a high unmet medical need, such as severe uncommon and orphan disorders.

The stock price of the Newark, California-based CymaBay surged by 24.6% to reach an all-time high of $32.01 during morning trading on Monday, though slightly below the offer price of $32.50 per share. Meanwhile, Gilead’s shares experienced a 1.1% increase to $74.49.

Gilead stands to gain CymaBay’s leading experimental drug, seladelpar, which analysts project could achieve sales of $1.9 billion by 2029 if it secures regulatory approval, according to data from LSEG. This acquisition is seen as a strategic move to expand Gilead’s market presence beyond its HIV segment, according to BMO Capital Markets analyst Evan Seigerman.

The U.S. Food and Drug Administration (FDA) is evaluating seladelpar as a potential treatment for primary biliary cholangitis, a form of chronic inflammatory liver disease, with a decision anticipated by Aug. 14.

This acquisition is particularly timely for Gilead, which has faced setbacks in recent clinical trials. Its experimental oral COVID antiviral treatment, obeldesivir, fell short of meeting its primary endpoint in a trial involving non-hospitalized patients. Additionally, the cancer drug Trodelvy did not demonstrate significant improvements in survival rates for previously treated patients with a specific type of lung cancer. Recently, the FDA placed a hold on trials testing Gilead’s blood cancer drug due to heightened risks of patient mortality in certain studies.

Gilead views the acquisition of CymaBay as an opportunity to enhance its liver disease drug portfolio, complementing its existing treatments for viral hepatitis. The transaction, expected to be finalized in the first quarter, is projected to neutral impact Gilead’s earnings in 2025, signaling the company’s long-term strategic vision and commitment to diversification and growth.

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