AstraZeneca Approached Gilead With A Deal That Could Be The Biggest On Record: Report

AstraZeneca Plc. AZN reached out to Gilead Sciences Inc. GILD regarding a potential merger last month, which could be the largest pharmaceutical industry deal on record.

What Happened

The UK-headquartered AstraZeneca, which is working on a fast-paced coronavirus vaccine, approached Gilead, known for its drug Remdesivir, the only approved treatment for COVID-19 in the United States, according to Bloomberg.

The preliminary approach has not led to formal discussions between the two companies. California-based Gilead is reportedly not interested in selling or merging with another large company and is instead focussing on partnerships and smaller acquisitions. 

The U.S. firm declined to comment on the possible merger telling Bloomberg it does not comment on rumors or speculation.

Why It Matters

The development of treatments for COVID-19 is unlikely to rake in big money for the drug majors, and the merger speculation is a sign that they are looking beyond the pandemic, Bloomberg notes.

AstraZeneca was the target of an unsuccessful takeover bid from Pfizer Inc. PFE  in 2014. The U.K. firm has since emerged as a major player in oncology and some other areas with a strong focus on R&D productivity. 

Gilead is known for developing single-drug HIV therapy and a focus on antivirals. However, some of the best-selling medicines of the drugmaker are now beyond patent protection, reported Bloomberg. 

Remedivisir, an antiviral made by Gilead, may sell as much as $7.7 billion during the current pandemic, according to Geoffrey Porges, an analyst at SVB Leerink, an investment bank specializing in healthcare. 

Gilead is valued at $96 billion as on Friday’s close, while AstraZeneca is valued at $140 billion.

Price Action

On Friday, AstraZeneca shares closed mostly unchanged at $53.85 in the regular session, while Gilead shares closed 1.02% lower at $76.75. Gilead shares traded 0.20% higher in the after-hours session at $76.90.