Type of information: Company acquisition
Acquired company: Kite Pharma (US - CA)
Acquiring company: Gilead Sciences (USA - CA)
Amount: $11.9 billion
- • On October 3, 2017, Gilead Sciences announced the completion of the previously announced transaction for Dodgers Merger Sub, a wholly-owned subsidiary of Gilead to acquire Kite Pharma, for $180 per share, net to the seller in cash, without interest, or approximately $11.9 billion in the aggregate. Pursuant to the merger agreement, Gilead and Dodgers Merger Sub commenced a tender offer on September 5, 2017 to acquire all outstanding shares of Kite. Gilead has now successfully completed the tender offer for all outstanding shares of common stock of Kite and had accepted for payment all shares validly tendered and not withdrawn as of the expiration time of the tender offer and would promptly pay for such shares, which shares represented approximately 66.20% of Kite's outstanding shares (including 2,003,002 shares delivered through Notices of Guaranteed Delivery, representing approximately 3.46% of the shares outstanding).
As a result of the completion of the merger, Kite has become a wholly-owned subsidiary of Gilead and the common stock of Kite will no longer be listed for trading on the NASDAQ Global Select Market, which is expected to take effect as of the close of market on October 3, 2017 .
- • On August 28, 2017, Gilead Sciences and Kite Pharma announced that the companies have entered into a definitive agreement pursuant to which Gilead will acquire Kite for $180.00 per share in cash. The transaction, which values Kite at approximately $11.9 billion , was unanimously approved by both the Gilead and Kite Boards of Directors and is anticipated to close in the fourth quarter of 2017.
- Under the terms of the merger agreement, a wholly-owned subsidiary of Gilead will promptly commence a tender offer to acquire all of the outstanding shares of Kite's common stock at a price of $180.00 per share in cash. Following successful completion of the tender offer, Gilead will acquire all remaining shares not tendered in the offer through a second step merger at the same price as in the tender offer.
- The consummation of the tender offer is subject to various conditions, including a minimum tender of at least a majority of outstanding Kite shares on a fully diluted basis, the expiration or termination of the waiting period under the Hart Scott Rodino Antitrust Improvements Act, and other customary conditions.
- Gilead plans to finance the transaction with a combination of cash on hand, bank debt and senior unsecured notes. The tender offer is not subject to a financing condition.
- The $180.00 per share acquisition price represents a 29 percent premium to Kite's closing on Friday, August 25 , and a 50 percent premium to the company's 30-day volume weighted average stock price.
- BofA Merrill Lynch and Lazard are acting as financial advisors to Gilead. Centerview Partners is acting as exclusive financial advisor to Kite. Jefferies LLC and Cowen and Company, LLC also provided advice to Kite. Skadden, Arps, Slate, Meagher & Flom is serving as legal counsel to Gilead and Sullivan & Cromwell LLP and Cooley LLP are serving as legal counsel to Kite.
- Gilead Sciences continues to diversify and to expand its pipeline. The group had already acquired several assets in NASH area (Phenex's Farnesoid X Receptor (FXR) program, Nimbus Apollo). NowKite Pharma's acquisition positions the group as a leader in cell therapy (CAR-T cell therapy and TCR cell therapy) and provides a pipeline in hematologic cancers and solid tumors.
Kite's most advanced therapy candidate, axicabtagene ciloleucel (axi-cel), is a CAR T therapy currently under priority review by the FDA and the EMA for patients with relapsed/refractory diffuse large B-cell lymphoma, transformed follicular lymphoma, and primary mediastinal B-cell lymphoma who are ineligible for autologous stem cell transplant. The FDA has set a target action date of November 29, 2017 under the Prescription Drug User Fee Act (PDUFA). Approval in Europe is expected in 2018.
- Kite has additional candidates in clinical trials in both hematologic cancers and solid tumors, including KITE-585, a CAR T therapy candidate that targets BCMA expressed in multiple myeloma.
- Research and development as well as the commercialization operations for Kite will remain based in Santa Monica, California , with product manufacturing remaining in El Segundo, California .
Axi-cel, coupled with Kite's leading manufacturing capabilities and its portfolio of next-generation technologies and therapy candidates, will serve as a foundation for Gilead's efforts to build an industry-leading cell therapy franchise.
Related: Cancer - Oncology - Cell therapy