CymaBay's stock surges as Gilead reaches $4.3 billion deal for liver-drug developer

By Eleanor Laise

Acquisition would expand Gilead's portfolio of liver-disease treatments

CymaBay Therapeutics Inc. shares (CBAY) jumped 24% early Monday after Gilead Sciences Inc. (GILD) reached a $4.3 billion deal to acquire the liver-drug developer for $32.50 per share in cash, a 27% premium to CymaBay's closing price Friday.

CymaBay's lead asset is seladelpar, an investigational treatment for primary biliary cholangitis, a type of liver disease that causes bile-duct damage. The U.S. Food and Drug Administration has granted priority review to seladelpar, and a regulatory decision is expected by mid-August.

The deal brings a potential new addition to the existing portfolio of liver-disease treatments at Gilead, which developed the leading drugs for viral hepatitis. "We are looking forward to advancing seladelpar by leveraging Gilead's long-standing expertise in treating and curing liver diseases," Gilead chairman and CEO Daniel O'Day said in a statement.

The deal is "a positive for Gilead shares," BMO Capital Markets analyst Evan David Seigerman wrote in a note Monday, as it deploys capital "into de-risked assets in therapeutics areas the company knows well with opportunity for synergy."

Primary biliary cholangitis is a rare, chronic disease that is more prevalent among women, affecting about 65 out of every 100,000 women in the U.S., researchers estimate. CymaBay said in September that about 62% of patients treated with seladelpar met a late-stage study's primary endpoint related to serum alkaline phosphatase and bilirubin, compared with 20% of those on placebo.

Subject to regulatory approval, the deal is expected to close in the first quarter of this year, the companies said. The transaction is expected to be roughly neutral to Gilead's earnings per share in 2025, the company said in a release, helping to drive earnings growth thereafter.

The deal comes on the heels of Gilead's mixed results for the fourth quarter. The company last week reported adjusted earnings per share that missed the FactSet consensus estimate, and the shares tumbled sharply in January after the company said a late-stage study of the antibody-drug conjugate Trodelvy failed to meet its primary goal.

Gilead shares fell 0.1% early Monday and have dropped 9% in the year to date, while the S&P 500 SPX has gained 5.4%.

-Eleanor Laise

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02-12-24 0935ET

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