Gilead Sciences is buying autoimmune disease biotech Ouro Medicines for nearly $2.2bn as the drugmaker kick-starts a dealmaking spree emboldened by its near-record share price.
The California-based company will pay privately held Ouro’s investors just less than $1.7bn in cash when the deal closes and a further $500mn once certain clinical trial milestones are hit, Gilead said on Monday after the FT reported a deal was imminent.
The transaction is Gilead’s second biotech acquisition in the past month following its $7.8bn takeover of Arcellx, with which it had an existing partnership to develop a novel cell therapy for patients with the blood cancer multiple myeloma.
It marks Gilead’s latest push to diversify away from its mainstay of HIV and cancer medicines by adding a novel treatment with huge potential to treat autoimmune diseases. Ouro is testing an antibody treatment known as a T-cell engager in early-stage trials to treat autoimmune diseases.
Shares in Gilead are trading close to all-time highs, having increased 28 per cent over the past year, giving the drugmaker a market value of $170bn as of Monday’s close. Its value eclipses that of pharmaceutical giants Pfizer and Bristol Myers Squibb.
Ouro’s lead drug represents a “pipeline-in-a-product” opportunity that could combat multiple diseases, said Evan Seigerman, a biotech analyst at RBC Capital Markets. The drug is being tested to treat four separate autoimmune diseases and had the potential to be used against multiple myeloma, he added.
“All in, we appreciate the company’s decisive use of capital to further business objectives and see continued room for upside associated with existing leadership in HIV and thoughtful diversification into new therapeutic areas,” Seigerman said in a note.
Unencumbered by imminent drug patent expirations and boosted by the strong performance of its HIV medicines franchise, Gilead is positioning itself to strike more biotech deals under chief executive Daniel O’Day after a quiet stretch for acquisitions.
Dietmar Berger, Gilead’s chief medical officer, said Ouro’s portfolio of early-stage medicines “complements our expanding inflammation pipeline and reflects our strategy to invest in innovative science that may redefine standards of care”.
Ouro launched at the start of last year after raising $120mn from a group of investors including private equity group TPG’s venture capital arm and UK drugmaker GSK as well as venture capital firms Monograph Capital and Norwest.
Biotech dealmaking has been booming in recent months as the wider pharmaceutical industry grapples with hundreds of billions of dollars of medicines coming off patents over the next few years.
Under O’Day’s leadership, Gilead has largely focused its dealmaking strategy on acquisitions that boost its oncology portfolio, including its $21bn purchase of Immunomedics in 2020 and $4.3bn takeover of CymaBay Therapeutics in 2024.
Gilead said it was in advanced discussions over a collaboration with Belgian biotech Galapagos to develop some of Oura’s medicines. Gilead is the largest shareholder in the inflammatory disease biotech group.
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