Gilead agrees to acquire Myogen through $2.5 billion transaction

By Jennifer Lanning Drey

Portland, Ore., Oct. 2 - Gilead Sciences, Inc. has agreed to purchase Myogen, Inc. in a $2.5 billion transaction, according to a Gilead news release.

The two-step acquisition is comprised of a cash tender offer for all of the outstanding Myogen common stock at $52.50 per share followed by a cash merger in which Gilead will acquire any remaining outstanding Myogen common stock at the same price per share, according to the release.

Gilead believes the transaction will help grow its pulmonology platform, John C. Martin, Gilead's chief executive officer, said during a company conference call held Monday.

The deal is expected to be dilutive to Gilead's earnings in 2007 and 2008, neutral in 2009 and accretive in 2010 and beyond, John Milligan, Gilead's chief financial officer, said during the call.

Milligan said the scope of the dilution will depend on factors including the timing of the transaction, the number of employees retained and the company's budget for next year.

The transaction is expected to be completed in the fourth quarter, and Milligan said Gilead has sufficient cash on hand to complete the acquisition.

Gilead considered Myogen an attractive acquisition target because of its potential to commercialize a new therapeutic product meeting an unmet medical need, Martin said.

Myogen's lead product candidate is ambrisentan for the treatment of pulmonary arterial hypertension (PAH). The drug is an orally available endothelin receptor antagonist.

"We are very excited about this opportunity to expand our respiratory franchise with a very promising, late-stage growing market," Martin said.

About 50,000 to 100,000 people in the United States have PAH, and 5,000 new cases are diagnosed annually, he said.

Ambrisentan has been granted orphan drug status in the United States and Europe.

Gilead believes data from two completed phase 3 clinical studies of ambrisentan will allow the company to file a New Drug Application with the Food and Drug Administration before the end of the year, Martin said.

In addition, the company expects to file for regulatory approval of ambrisentan in the European Union early in 2007, he said.

"We believe ambrisentan has the potential to be the best product in the endothelin receptor antagonist class based on its efficacy and safety profile and lack of drug interactions," Martin said.

The company also believes the drug will provide additional longer-term possibilities.

"We do think there's a strong opportunity for the future to build more products, products that we could potentially build off ambrisentan," Martin said.

Myogen also began a phase 3 clinical trial in June to evaluate darusentan, its product candidate for treatment of patients with resistant hypertension. The company expects to start a second phase 3 clinical trial of the drug in the fourth quarter, Martin said.

Myogen is a Denver-based biopharmaceutical company.

Gilead is a biopharmaceutical company located in Foster City, Calif.

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