<I suspect they were mainly after darusentan.>
Gilead Agrees to Buy Myogen With Eye on Hypertension Drug
By ANGELA MOORE WSJ
October 2, 2006 4:57 p.m.
Gilead Sciences Inc. agreed to acquire Myogen Inc. for about $2.5 billion, a move aimed at gaining ownership of the biotechnology company's lead product candidate, a potential treatment of pulmonary arterial hypertension.
Gilead's $52.50-a-share offer is a 50% premium over Myogen's share price of $35.08 on Friday. At 4 p.m. in Nasdaq Stock Market composite trading, Myogen's shares were up 47%, or $16.36, at $51.44, while Gilead stock was off $4.49, or 6.5%, at $64.28.
Ambrisentan, Myogen's lead product candidate, is an orally available endothelin receptor antagonist for the potential treatment of pulmonary arterial hypertension, or PAH. Acquiring Myogen of Westminster, Colo., brings to Gilead "a late-stage product candidate that addresses an area of significant unmet medical need and further enhances our growing focus on pulmonology," said John Martin, the biopharmaceutical company's president and chief executive.
The companies believe data from two completed pivotal Phase III studies evaluating the safety and efficacy of the product as a potential treatment for PAH would support a new-drug application. Myogen currently expects to file such an application with the U.S. Food and Drug Administration as early as the fourth quarter, Gilead said.
PAH is continuous high blood pressure in the pulmonary artery. Ambrisentan already has been granted orphan-drug status for the potential treatment of PAH in both the U.S. and Europe. British drug company GlaxoSmithKline PLC holds rights to the product outside the U.S.
Executives from Gilead, of Foster City, Calif., said that the "scarcity value" of a drug in late-stage testing that addresses an unmet medical need justified the premium price offered for Myogen.
"We felt that the premium was a fair value for what we were doing here, and that this was in fact a product that we could build a franchise around," Gilead Chief Financial Officer John Milligan said.
The companies said the acquisition will be a two-step process in which Gilead will make a tender offer for all outstanding Myogen common stock followed by a cash merger in which Gilead would buy any remaining outstanding common stock, also for $52.50 a share.
Gilead and Myogen expect the tender offer to be completed before the end of this year. Lazard advised Gilead, while Goldman Sachs Group advised Myogen.
Gilead said about 88,000 people in the U.S. currently have PAH, but only 30% are diagnosed and even fewer are receiving treatment. About 5,000 new patients are diagnosed each year, the company said.
The current PAH-treatment market leader is Tracleer, produced by Swiss pharmaceutical company Actelion Ltd.
Mr. Martin, the Gilead CEO, said Tracleer had $339 million in sales during the first half of 2006. "We believe we have a product with a stronger profile" that can take market share as well as grow with overall demand, he said.
Myogen in July reported that its second-quarter loss narrowed from the year before -- to $18.5 million from $21.5 million -- as revenue rose to $4.1 million from $1.58 million. Gilead that month said net income for its second quarter rose to $265 million from $196 million the year before, as revenue rose 38%, to $685 million.
=====================
I know some people don't believe in MYOG. But I personally am in the middle about them being taken out. Don't get me wrong, cash is always good but... oh well. |
