By Cara Lombardo and Jonathan D. Rockoff
Gilead Sciences Inc. is nearing a deal to buy biotech Immunomedics Inc. and its prized breast-cancer drug for more than $20 billion.
Immunomedics has a market value of roughly $10 billion following a recent surge in its stock, meaning that Gilead /zigman2/quotes/210293917/composite GILD -0.46% is paying up to secure ownership of the company. A deal could be announced Monday if not sooner, assuming talks don’t fall apart and a rival drugmaker doesn’t jump in, the Wall Street Journal reported.
Immunomedics , based in Morris Plains, N.J., sells breast-cancer drug Trodelvy, which would be attractive to several large drugmakers, many of which have set their sights on adding more fast-growing oncology therapies to their portfolios. Breast-cancer treatment is one of the most lucrative segments of the world-wide cancer-drugs market, which EvaluatePharma pegs at $157 billion this year.
In April, Trodelvy was approved in the U.S. to treat a form of the disease that has spread to other parts of the body and is known as triple-negative breast cancer.
An acquisition would give Gilead—an antiviral-drug leader that has been seeking for years to build up its portfolio of therapies for other diseases—a foothold in the fast-growing cancer drug market. And Gilead doesn’t take on any risk that regulators won’t approve the drug, since they already have done it.
The Foster City, Calif., company is best known for its blockbuster hepatitis C offerings and HIV therapies. Most recently, Gilead has drawn notice for Covid-19 drug remdesivir, which the U.S. authorized for use in July and is expected to significantly boost the company’s revenue this year.
Cancer drugs, however, promise to provide Gilead a more enduring business that could help the company offset declining sales of its hepatitis C drugs and competition for its HIV franchise.
Gilead Chief Executive Daniel O’Day, who took the helm in March 2019, has since been inking deals designed to bolster the company’s portfolio. In 2019, it spent more than $5 billion deepening a partnership with Belgian biotech firm Galapagos NV. Earlier this year, it paid about $5 billion for biotech company Forty Seven Inc. and its blood-cancer drug.
Avoro’s Behzad Aghazadeh remains Immunomedics’ chairman and Avoro owns a roughly 11% stake in the company, according to FactSet.
Immunomedics’ share price is up 99% so far this year. Trodelvy rang up $20.1 million in net sales in its first two months on the market, which Jefferies & Co. analysts said indicated the drug could become a go-to treatment for triple-negative breast cancer. In 2022, Jefferies estimates, Trodelvy sales will reach $480 million.