- Gilead said Sunday it agreed to acquire cancer drug company Immunomedics for $ 21 billion.
- Shares of Immunomedic rose as much as 1
- Immunomedics sells Trodelvy, a drug used to treat several forms of breast cancer and which is being evaluated for a number of other potential cancer indications.
- Trodelvy was approved by the FDA in April and posted sales of $ 20 million in its first two months on the market.
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Gilead’s proposed acquisition of Immunomedics for $ 21 billion sent shares in the cancer drug company up 106% on Monday.
Immunomedics has developed Trodelvy, a drug-antibody conjugate used for the treatment of triple negative breast cancer.
Trodelvy received FDA clearance in April and posted sales of $ 20 million in the first two months on the market. The drug is expected to generate successful sales over its lifetime and is being evaluated as a treatment for a number of other cancer and solid tumor indications.
Gilead expects the deal to immediately strengthen its revenue growth and be neutral to increase adjusted earnings per share in 2023, as well as “significantly accretive thereafter,” Gilead said.
Gilead will finance the acquisition with $ 15 billion in cash and $ 6 billion in newly issued debt.
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Over the years, Gilead has received tremendous pressure from investors to put its massive sum of money to good use. At the end of 2018, Gilead had $ 30 billion in cash and short-term equivalents, according to data from YCharts.com.
Gilead’s cash is expected to drop to $ 4 billion, as the company’s most recent 10-Q statement indicates it has $ 18.91 billion in cash and intends to use $ 15 billion in cash to fund the deal. with Immunomedics.
Gilead investors have approved the deal. Shares of Gilead were up 4% in trading on Monday.
Gilead said it plans to maintain a commercial-quality credit rating after the transaction and the deal will not change its commitment to maintain and increase its dividend over time.
The $ 21 billion deal was approved by the boards of both companies and is expected to close in the fourth quarter of 2020.
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