QDIS Blog

Forbes it seems has weighed in on the move by Gilead to acquire Myogen for a 50% premium.

Gilead’s Big Shift - Forbes.com

The article says that several analyst didn’t like this because they felt it took Gilead’s focus away from antivirals. My thought on this is that you can never keep analyst happy, they seem to enjoy being negative. Now everyone wants Gilead to stay focused on just antivirals. At other times they have said that other companies (not necessarily Gilead) are too focused and should diversify. The problem is, they never really give their rational as to why that should be the case and why the current timing is wrong.

I personally think that gilead had money and needed to use it to diversify. I do think they probably paid too much. a 50% premium is a little on the expensive side but as I said earlier, I feel the potential for ambrisentan may be worth it.

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Seems you can’t turn on your computer and read pharmaceutical news these days without seeing another merger or acquisition being announced.

Gilead to acquire Myogen for $2.5 billion - Yahoo! News

Gilead is the most recent player to spend a lot of money to purchase another company. They will spend over $2.5 billion to purchase Mycogen. Some analysts were shocked that Gilead, who only has experience in the HIV area, would go for a company that is outside this “area of expertise”. To me, it just makes sense; they are looking to diversify which is a good thing. Also Myogen has good pipeline of anti-hypertension drugs which show promise. Ambrisentan should have an NDA filed by the end of the year and is looked at as a potential billion dollar a year block-buster drug.

Gilead had already purchased Corus in Seattle, WA earlier this year for an inhaled antibiotic and so this further diversification should not have come as a shock. Corus’s inhaled antibiotic was for infections common among cystic fibrosis patients and is for a pulmonary disorder. Myogen markets Flolan which is one of the few drugs used to treat primary pulmonary hypertension (by agreement with GlaxoSmithKline).

Other Resources

• Gilead — Gilead Sciences to Acquire Myogen, Inc. for $2.5 Billion
• Myogen Press Release - Gilead to Acquire Myogen.pdf
• Yahoo! News Search Results for Gilead Myogen
• Gilead Myogen - Google News

Technorati Tags: Gilead, pharma M&A, pharmaceutical deals, Myogen

Email Ed Vawter

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