FOSTER CITY, Calif.—Despite a challenging economy, Gilead Sciences Inc. has stood strong financially, says CEO Dr. John C. Martin, and that has put the company in a position to boost its growth and its pipeline with a little merger and acquisition activity—specifically the acquisition of Branford, Conn.-based CGI Pharmaceuticals Inc.
"Our strong financial position allows us to look to the outside for opportunities and to judiciously use M&A and business development efforts to enrich our pipeline," Martin says. "We are actively considering acquisitions and partnerships in areas of unmet medical need that are relatively modest in terms of initial investment and have clear decision points on the near-term horizon. An example of us executing on this strategy is our acquisition of CGI for up to $120 million during the second quarter [of our fiscal year]. While an early-stage company, CGI has established itself with expertise in the area of protein kinase biology and small-molecule discovery, and we will explore the use of their lead Syk inhibitor for inflammatory diseases."
The deal was signed in late June and the transaction closed July 8, at which time CGI became a wholly owned subsidiary of Gilead—with plans calling for it to remain in Branford.
Under the terms of the deal, Gilead was to pay the majority of the $120 million for the privately held, development-stage pharma up front, with the remainder to be paid based on clinical development progress.
Among CGI's library of proprietary small-molecule kinase inhibitors, the lead preclinical compound targets spleen tyrosine kinase (Syk) and could have unique applications for the treatment of serious inflammatory diseases, including rheumatoid arthritis.
"We are pleased to join the Gilead organization and look forward to partnering with the company to deliver on the promise of selective kinase inhibitors in our proprietary library of compounds," said Dr. Mark Velleca, founder and senior vice president of CGI, in the official news release about the deal. "We are confident that Gilead's knowledge and experience developing small-molecule candidates for a range of clinical indications will be instrumental in helping to progress our compounds toward clinical development for diseases where tremendous unmet medical need exists."
CGI's total small-molecule kinase inhibitor library spans more than 50,000 compounds, all of which were designed and synthesized by CGI and, to date, CGI has been awarded eight U.S. patents covering its novel collection. CGI's three drug discovery and development programs were all based on hits obtained from its own library.
"The acquisition of CGI represents a unique opportunity to expand our research efforts in an interesting and promising area of drug discovery," says Dr. Norbert W. Bischofberger, chief scientific officer and executive vice president of research and development of Gilead. "CGI has established itself in the area of protein kinase biology and small-molecule discovery, and the company's scientific leadership and expertise represents a strong strategic fit with Gilead's existing research organization. We look forward to advancing compounds in CGI's portfolio toward clinical development."
Gilead boasts annual revenues that now exceed $7 billion, after what it calls a rapid expansion over the past two decades, and the operations now span several continents and employ some 4,000 employees who focus in such primary areas as HIV/AIDS, liver disease and serious cardiovascular and respiratory conditions.
Much of this growth and the reported strength of the company's financial position recently have been fueled in large part by the company's antiviral franchise, with a 15-percent product sales increase in the second quarter of 2010 driven primarily by strong growth in sales of Atripla. Truvada and Viread also fared well, and all three drugs are used in the treatment of HIV infection. Other strong products included Letairis for the treatment of pulmonary arterial hypertension and Ranexa for the treatment of chronic angina.
"Our strong financial position allows us to look to the outside for opportunities and to judiciously use M&A and business development efforts to enrich our pipeline," Martin says. "We are actively considering acquisitions and partnerships in areas of unmet medical need that are relatively modest in terms of initial investment and have clear decision points on the near-term horizon. An example of us executing on this strategy is our acquisition of CGI for up to $120 million during the second quarter [of our fiscal year]. While an early-stage company, CGI has established itself with expertise in the area of protein kinase biology and small-molecule discovery, and we will explore the use of their lead Syk inhibitor for inflammatory diseases."
The deal was signed in late June and the transaction closed July 8, at which time CGI became a wholly owned subsidiary of Gilead—with plans calling for it to remain in Branford.
Under the terms of the deal, Gilead was to pay the majority of the $120 million for the privately held, development-stage pharma up front, with the remainder to be paid based on clinical development progress.
Among CGI's library of proprietary small-molecule kinase inhibitors, the lead preclinical compound targets spleen tyrosine kinase (Syk) and could have unique applications for the treatment of serious inflammatory diseases, including rheumatoid arthritis.
"We are pleased to join the Gilead organization and look forward to partnering with the company to deliver on the promise of selective kinase inhibitors in our proprietary library of compounds," said Dr. Mark Velleca, founder and senior vice president of CGI, in the official news release about the deal. "We are confident that Gilead's knowledge and experience developing small-molecule candidates for a range of clinical indications will be instrumental in helping to progress our compounds toward clinical development for diseases where tremendous unmet medical need exists."
CGI's total small-molecule kinase inhibitor library spans more than 50,000 compounds, all of which were designed and synthesized by CGI and, to date, CGI has been awarded eight U.S. patents covering its novel collection. CGI's three drug discovery and development programs were all based on hits obtained from its own library.
"The acquisition of CGI represents a unique opportunity to expand our research efforts in an interesting and promising area of drug discovery," says Dr. Norbert W. Bischofberger, chief scientific officer and executive vice president of research and development of Gilead. "CGI has established itself in the area of protein kinase biology and small-molecule discovery, and the company's scientific leadership and expertise represents a strong strategic fit with Gilead's existing research organization. We look forward to advancing compounds in CGI's portfolio toward clinical development."
Gilead boasts annual revenues that now exceed $7 billion, after what it calls a rapid expansion over the past two decades, and the operations now span several continents and employ some 4,000 employees who focus in such primary areas as HIV/AIDS, liver disease and serious cardiovascular and respiratory conditions.
Much of this growth and the reported strength of the company's financial position recently have been fueled in large part by the company's antiviral franchise, with a 15-percent product sales increase in the second quarter of 2010 driven primarily by strong growth in sales of Atripla. Truvada and Viread also fared well, and all three drugs are used in the treatment of HIV infection. Other strong products included Letairis for the treatment of pulmonary arterial hypertension and Ranexa for the treatment of chronic angina.
