Can Gilead Squeeze $12 Billion From Kite Pharma?
Gilead Sciences, Inc. just took a bold leap into the unknown with an agreement to acquire Kite Pharma Inc. for $180 per share or about $11.9 billion. Gilead's last 11-figure bet turned out to be one of the best investments in biopharma history, and it's tempting to believe the company can catch lightning in a bottle once again.
Unfortunately, this deal is nothing like the Pharmasset purchase that helped Gilead become one of the most profitable drugmakers of its time. The commercial viability of CAR-T therapies, which involve withdrawing, modifying, and then reintroducing patient cells, is a big scary question mark. Despite the challenges, Gilead thinks it can make this deal cash flow positive within a few years. Here's what's standing in the way.
Unfortunately, this deal is nothing like the Pharmasset purchase that helped Gilead become one of the most profitable drugmakers of its time. The commercial viability of CAR-T therapies, which involve withdrawing, modifying, and then reintroducing patient cells, is a big scary question mark. Despite the challenges, Gilead thinks it can make this deal cash flow positive within a few years. Here's what's standing in the way.