Shares of Immunomedics surged more than 100% in premarket trading Monday.
The deal will provide Gilead access to the drug Trodelvy, a Food and Drug Administration-approved treatment for metastatic triple-negative breast cancer.
Gilead said it will acquire Immunomedics for $88 per share in cash. The offer will be funded through about $15 billion in cash on hand and $6 billion in newly issued debt. The transaction is anticipated to close in the fourth quarter of 2020, according to the statement.
“This acquisition represents significant progress in Gilead’s work to build a strong and diverse oncology portfolio,” Gilead Chief Executive Daniel O’Day said in a statement.
“Trodelvy is an approved, transformational medicine for a form of cancer that is particularly challenging to treat,” O’Day said. “We will now continue to explore its potential to treat many other types of cancer, both as a monotherapy and in combination with other treatments.”
Immunomedics has a market value of roughly $10 billion after the company’s shares nearly doubled this year.
The deal comes as Gilead’s hepatitis C business has struggled in recent years and its overall sales have fallen as the coronavirus pandemic weakens demand for some drugs. Gilead’s sales fell 10% during the second quarter to $5.1 billion.
In recent years, biotech companies have pushed deep into cancer treatments. According to the World Health Organization, cancer is the second leading cause of death globally, killing nearly 10 million people in 2018.
Gilead has also recently turned its attention to the pandemic. In May, the Food and Drug Administration granted Gilead’s antiviral drug remdesivir an emergency use authorization, allowing hospitals and doctors to use the drug on patients hospitalized with Covid-19 even though the drug has not been formally approved by the agency. The intravenous drug has helped shorten the recovery time of some hospitalized patients.
It is currently developing an inhaled version of the drug, which it will administer through a nebulizer, a delivery device that can turn liquid medicines into a mist.