Gilead Sciences to acquire CGI Pharma for up to $120 million

USA-based Gilead Sciences has entered into an agreement to acquire CGI Pharmaceuticals, a privately-held, development-stage pharmaceutical company focused on small-molecule chemistry and kinase biology.

Under the terms of the deal, Gilead will buy CGI for up to $120 million, the majority as an upfront payment and the remaining based on clinical development progress, all of which will be financed through available cash on hand. Gilead anticipates that the deal would close in the third quarter of 2010, subject to satisfaction of certain closing conditions. After closing, CGI will continue operations at its current headquarters in Branford, Connecticut, as a wholly-owned subsidiary of Gilead.

CGI has generated a library of proprietary small molecule kinase inhibitors. The lead preclinical compound from this library targets spleen tyrosine kinase (Syk) and could have unique applications for the treatment of serious inflammatory diseases, including rheumatoid arthritis.

Move away from antivirals

Development of potential drugs for the treatment of RA would take Gilead away from its traditional area of antivirals, where its lead products, the HIV agents Atripla (efavirenz/emtricitabine/ tenofovir disoproxil fumarate) and Truvada (emtricitabine and tenofovir disoproxil fumarate) generated sales of $5.84 billion last year (The Pharma Letter January 27). The US firm also receives royalties on sales of the flu drug Tamiflu (oseltamivir) achieved by Swiss drug major Roche.