CymaBay Therapeutics Deal May Not Be Needle Moving For $100B Valued Gilead, But Acquisition Is Reasonably Priced: Analyst

Monday, Gilead Sciences Inc GILD agreed to acquire  CymaBay Therapeutics Inc CBAY for $32.50 per share in cash or a total equity value of $4.3 billion.

The addition of CymaBay’s investigational lead product candidate, seladelpar for primary biliary cholangitis (PBC), including pruritus, complements Gilead’s existing liver portfolio.

Baird writes that Gilead’s investment in seladelpar for liver disease appears to be a strategically sound move, especially compared to potential investments in oncology. 

The company’s focus on a space where it has demonstrated commercial success is seen as a positive step to restore confidence in its growth prospects. 

Despite the modest launch history of Intercept Pharmaceutical Inc’s ICPT Ocaliva (obeticholic acid), a similar trajectory is expected for Seladelpar. 

However, being a later entrant, seladelpar could benefit from the market established by Intercept in the second-line setting.

Projections indicate peak unadjusted sales of approximately $800 million for seladelpar, with the drug showing promise for PBC and the potential to achieve blockbuster peak annual sales. 

While this might not be a game-changer for a company of Gilead’s size, it is considered a low-risk acquisition, leveraging its strong commercial capabilities in the liver disease space. 

Additionally, seladelpar’s significance in addressing pruritus, a key secondary endpoint, could differentiate it in the PBC landscape, mainly since Ocaliva has been associated with increased itching compared to placebo, and front-line UDCA does not alleviate itching.

Baird keeps the Neutral rating for Gilead with a price target of $80.

Price Action: GILD shares are down 0.95% at $73.74 on the last check Tuesday.