Gilead to buy cancer treatment maker for $11.9B

Gilead Sciences will buy Kite Pharma for about $11.9 billion, making its biggest-ever deal for a breakthrough new cancer treatment that will help diversify away from its eroding franchise of medicines for hepatitis C infections.

With Kite, Gilead will gain a foothold in one of the most promising fields in oncology: treatments known as CAR-T that reengineer the body’s own immune system to fight tumors.

The drugmaker said Monday that it will pay $180 a share in an all-cash deal.

That’s 29 percent above the Friday closing price for Santa Monica, Calif.-based Kite.

“This is a pivot to cellular therapy as our main strategy going forward,” Gilead Chief Executive John Milligan said on a conference call with analysts. The company, which hasn’t had great success in cancer so far, will continue to look for assets. “We’re not going quiet after this deal.”

The acquisition caps more than a year of search as valuations soared for biotechnology companies focused on breakthrough therapies, and the best got bought by rivals.

Gilead, seeking to fill a gap left by declining sales of hepatitis C drugs, said last year it was feeling “an urgency to look at external opportunities.”

Gilead was ready to pay the price for Kite, whose shares had tripled just this year through Friday.

Kite, which doesn’t have a treatment on the market yet, is awaiting U.S. approval for a drug for non-Hodgkin lymphoma, a type of blood cancer.

Kite said this month the treatment could be ready for a launch as soon as September, sending the shares to new records.

It’s racing Swiss giant Novartis AG to get the first CAR-T product on the market.

Kite’s most advanced therapy, axicabtagene ciloleucel, would treat patients with tough form of non-Hogkin lymphoma.

ERIC RISBERG/AP Gilead Sciences looks to gain a foothold in one of the most promising fields in oncology, treatments known as CAR-T.