Gilead Confirms Deal To Buy Biotech Forty Seven For $4.9B

Forty Seven Inc FTSV shares were skyrocketing Monday morning, adding on to the roughly 19% gain the stock made Friday, after Gilead Sciences, Inc. GILD agreed to buy the smaller biotech.

The move was expected: a Bloomberg report late Thursday said Gilead approached Forty Seven regarding a potential takeover, but also suggested other parties were interested as well.

Gilead, Forty Seven's Deal Terms

Gilead said in a Monday press release that it has entered into a definitive agreement to acquire Menlo Park, California-based Forty Seven for $95.50 per share in cash, or $4.9 billion.

This per-share value represents a 96% premium to the $48.79 at which the stock closed Thursday, when speculation regarding the interest began building. 

The boards of both companies approved the transaction.

The companies expect the deal to close in the second quarter of 2020 contingent upon regulatory approvals and other customary closing conditions.

Gilead's Deal Logic

Gilead said the addition of Forty Seven's lead product candidate magrolimab will strengthen its immuno-oncology R&D portfolio.

Margolimab is a monoclonal antibody being evaluated in the clinics for the treatment of several cancers such as myelodysplastic syndrome, acute myeloid leukemia and diffuse large B-cell lymphoma.

In December, Forty Seven reported promising Phase 1b study results from the candidate in patients with MDS and AML at the American Society of Hematology meeting. 

"Magrolimab complements our existing work in hematology, adding a non-cell therapy program that complements Kite's pipeline of cell therapies for hematological cancers," Gilead CEO Daniel O'Day said in a statement. 

Forty Seven expects the deal to help expedite its R&D program.

"We are pleased to join Gilead and believe that by combining our scientific expertise with Gilead's strength in developing treatments that modify the immune system, we will be able to more rapidly advance our therapies," CEO Mark McCamish said in a statement. 

Forty Seven shares were up 61.91% at $93.91 in Monday's premarket session, while Gilead shares were up 1.21% at $70.20. 

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