Gilead Sciences has agreed acquire Kite Pharma, a Santa Monica, California-headquartered cell therapy company, for approximately $11.9 billion.

Under the agreement, Gilead will acquire Kite for $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 transaction is anticipated to close in the fourth quarter of 2017.

Kite is enagaged in the emerging field of cell therapy, which uses a patient’s own immune cells to fight cancer, and some analysts have projected near blockbuster status for its lead therapy. The company has developed engineered cell therapies that express either a chimeric antigen receptor (CAR) or an engineered T cell receptor (TCR), depending on the type of cancer. Kite’s most advanced therapy candidate, axicabtagene ciloleucel (axi-cel), is a CAR T therapy currently under priority review by the US Food and Drug Administration (FDA). It is indicated as a treatment for refractory aggressive non-Hodgkin lymphoma, which includes diffuse large B-cell lymphoma (DLBCL), transformed follicular lymphoma (TFL) and primary mediastinal B-cell lymphoma (PMBCL). The FDA has set a target action date of November 29, 2017 under the Prescription Drug User Fee Act. A marketing authorization application has also been filed for axi-cel for the treatment of relapsed/refractory DLBCL, TFL, and PMBCL with the European Medicines Agency. Approval in Europe is expected in 2018, according to the company. Some analysts have projected near blockbuster status for the drug. A recent analysis by Clarivate Analytics projects sales of more than $900 million in 2021.

Kite has additional candidates in clinical trials in both hematologic cancers and solid tumors, including KITE-585, a CAR T therapy candidate that targets th B cell maturation antigen (BCMA) expressed in multiple myeloma.

“The acquisition of Kite establishes Gilead as a leader in cellular therapy and provides a foundation from which to drive continued innovation for people with advanced cancers,” said John F. Milligan, PhD, Gilead’s president and chief executive officer, in a company statement. “The field of cell therapy has advanced very quickly, to the point where the science and technology have opened a clear path toward a potential cure for patients. We are greatly impressed with the Kite team and what they have accomplished, and share their belief that cell therapy will be the cornerstone of treating cancer. Our similar cultures and histories of driving rapid innovation in order to bring more effective and safer products to as many patients as possible make this an excellent strategic fit.”

After the closing of the acquisition, 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.

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.

Source: Gilead Sciences and Kite Pharma