After a wild 4-year roller coaster ride, it looks like ImmunoMedics $IMMU is getting its fairy-tale ending after all.
Saturday evening the Wall Street Journal reported that a deal is all but done for Gilead $GILD to buy out the company for more than $20 billion, which gives the big biotech Trodelvy, newly approved for metastatic triple negative breast cancer.
The drug comes with a peak sales estimate of $3 billion a year and a golden ticket for a company like Gilead looking to become an overnight contender in the oncology market. Immunomedics closed on Friday with a market cap of $9.8 billion, leaving Gilead willing to pay a 100%-plus premium — which almost certainly indicates a brisk bidding war.
Four years ago Seattle Genetics $SGEN CEO Clay Siegall almost had that drug — then called IMMU-132 — in his hands for $300 million upfront and up to $2 billion overall. Then venBio, a major stockholder, campaigned hard to overturn the deal, succeeded and seized control from the founders.
The drama, however, had just begun. The drug was rejected by the FDA, the agency later raised concerns about a data breach and two top execs hit the exits.
The OK came 4 months ago, setting the stage for a Gilead buyout that will likely arrive quite soon, if this fits the textbook scenario usually laid out by these 11th hour Wall Street Journal exclusives. One possible threat: a higher bid.
The is Gilead CEO Dan O’Day’s 7th straight cancer deals since he took the reins back in March. This deals include the $5 billion Forty Seven buyout, which had been the topper until now. This latest deal fits into a pattern of M&A pacts in 2020, with buyers looking for bolt-ons to add new products to portfolios and pipelines. If this deal does go through, it will be the biggest of the year to date, easily topping the $6.5 billion Momenta acquisition.
Cancer became even more important to O’Day after the CEO was dealt a severe setback by the rejection of filgotinib, which may well spell the end of those dreams. Buying Trodelvy now would soften that blow considerably.