2/2
© Reuters. FILE PHOTO: Gilead Sciences Inc pharmaceutical company is seen during the outbreak of the coronavirus disease (COVID-19), in California

2/2

By Paul Sandle and Pamela Barbaglia

LONDON (Reuters) – Britain’s AstraZeneca Plc (L:) has approached U.S. rival Gilead Sciences Inc (O:) about a possible merger that would form one the world’s largest drug companies, Bloomberg News reported on Sunday, citing people familiar with the matter.

Any deal would unite two of the companies at the forefront of the industry’s efforts to fight the new coronavirus and could be politically sensitive as governments seek control over potential vaccines or treatments.

AstraZeneca contacted Gilead last month, but the U.S. firm was not interested in combining with another big pharmaceutical company, the Bloomberg report https://bloom.bg/3h2GU9e said.

A spokeswoman for AstraZeneca said the company does not comment on rumors or speculation.

Gilead, the world’s largest maker of HIV drugs, did not immediately respond to a request for comment.

If combined, the two companies would have a market capitalization of about $232 billion, based on Friday’s closing stock levels.

That would exceed Merck & Co (N:) and Pfizer (N:) at $207 billion and $200 billion respectively.

Two sources familiar with AstraZeneca’s thinking questioned the rationale of a tie-up, telling Reuters Gilead’s remdesivir for COVID-19 patients was insufficient to justify pursuing a multi-billion deal that would detract from AstraZeneca’s work on a coronavirus vaccine.

One of the sources questioned the timing. Given the potential impact a successful vaccine would have on AstraZeneca’s share price, it does not need the additional strain of pursuing a record-breaking deal, especially when travel constraints make face-to-face meetings difficult.

AstraZeneca’s top-selling product is its lung cancer drug Tagrisso, which generated revenues of $982 million in the first quarter.

Gilead’s biggest blockbuster is HIV drug Biktarvy, with sales of $1.69 billion in the first quarter.

Gilead, AstraZeneca and other drugmakers, including Eli Lilly and Co (N:), Pfizer Inc (N:) and Merck & Co Inc (N:), are racing to develop vaccines or treatments for COVID-19, the respiratory illness caused by the novel coronavirus.

More than 6.90 million people have been reported infected with the coronavirus globally and 399,025 have died, a Reuters tally showed on Sunday.

It is unclear whether a vaccine will work, but AstraZeneca’s partnership with Oxford University to develop one is among a handful of initiatives U.S. President Donald Trump’s COVID task force has backed.

Gilead has also been in the vanguard of COVID-19 treatments.

Its remdesivir antiviral is the first drug to lead to improvement in COVID-19 patients in formal clinical trials.

The drug has been cleared for emergency use in COVID-19 patients in countries including the United States and South Korea and could bring in more than $7 billion in annual sales for Gilead by 2022 if governments seek to stockpile it against future outbreaks, SVB Leerink has estimated.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

2020-06-07