For years, investors have pestered Gilead Sciences with the same question in myriad phrasings: When are you going to buy something big? Now, before the ink has even dried on the company’s commitment to a $21 billion acquisition, they’re wondering just how Gilead can justify that price.

The deal, which gives Gilead control of the cancer drug maker Immunomedics, came at a more than 100% premium to the company’s most recent stock price, making it the most expensive large acquisition in 10 years of biotech history, according to the analysts at SVB Leerink. Gilead management said it expects the deal to pay for itself by 2023, but that depends on quite a few things breaking in the company’s favor. 

In monetary terms, it would require Immunomedics’ lead drug, Trodelvy, to bring in about $5 billion a year. Cowen biotech analyst Phil Nadeau said the drug could deliver more than $4 billion in peak sales — at least approaching the target. 

Unlock this article by subscribing to STAT Plus and enjoy your first 30 days free!

GET STARTED

What is it?

STAT Plus is STAT's premium subscription service for in-depth biotech, pharma, policy, and life science coverage and analysis. Our award-winning team covers news on Wall Street, policy developments in Washington, early science breakthroughs and clinical trial results, and health care disruption in Silicon Valley and beyond.

What's included?

  • Daily reporting and analysis
  • The most comprehensive industry coverage from a powerhouse team of reporters
  • Subscriber-only newsletters
  • Daily newsletters to brief you on the most important industry news of the day
  • STAT+ Conversations
  • Weekly opportunities to engage with our reporters and leading industry experts in live video conversations
  • Exclusive industry events
  • Premium access to subscriber-only networking events around the country
  • The best reporters in the industry
  • The most trusted and well-connected newsroom in the health care industry
  • And much more
  • Exclusive interviews with industry leaders, profiles, and premium tools, like our CRISPR Trackr.
Sign up to receive a free weekly opinions recap from our community of experts.
Privacy Policy