Gilead Sciences is paying up to $120 million to take over CGI Pharmaceuticals. The majority of purchase price will reportedly be made as an up-front 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 will close in the third quarter, upon which CGI will continue operations in Branford, CT, as a wholly owned subsidiary of Gilead.
CGI is focused on small molecule chemistry and kinase biology. The firm has generated a library of 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, according to CGI.
In October 2009, Genentech paid CGI $25 million up front for exclusive rights to discover, develop, manufacture, and commercialize therapeutics for an undisclosed target for the treatment of multiple oncology and autoimmune indications. CGI could earn $500 million in milestone and option payments.
“The acquisition of CGI represents a unique opportunity to expand our research efforts in an interesting and promising area of drug discovery,” remarks Norbert W. Bischofberger, Ph.D., Gilead’s evp R&D and CSO. “CGI has established itself in the area of protein kinase biology and small molecule discovery, and the company’s scientific leadership and expertise represents a strong strategic fit with Gilead’s existing research organization.”