Gilead Sciences, Inc. and YM BioSciences (YM) Inc, a drug development company, have signed a definitive agreement under which Gilead will acquire YM for US$ 2.95 per share in cash. The transaction has received the unanimous approval of YM's Board of Directors, and values YM at approximately US$ 510 million, with YM reporting C$ 125.5 million in cash and cash equivalents as of September 30, 2012.
Gilead plans to fund the acquisition with cash on hand. The transaction is expected to close in the first quarter of 2013.
YM's lead drug candidate, CYT387, is an orally-administered, once-daily, selective inhibitor of the Janus kinase (JAK) family, specifically JAK1 and JAK2. The JAK enzymes have been implicated in a number of disorders including myeloproliferative diseases, inflammatory disorders and certain cancers. YM has reported positive results from a phase I/II clinical trial of CYT387 in 166 patients with myelofibrosis, a life-threatening myeloproliferative disease. Pending completion of the acquisition, Gilead intends to initiate a pivotal phase III clinical trial of CYT387 in myelofibrosis in the second half of 2013.
"This acquisition represents an opportunity to add a complementary clinical programme in the area of hematologic cancers to our growing oncology portfolio," said Norbert W Bischofberger, PhD, Gilead's executive vice president, Research and Development and chief scientific officer. "Based on promising phase II data, we believe CYT387 could provide important clinical benefit for patients with myelofibrosis, including potential improvements with regard to anaemia and decreased dependence on blood transfusions. We look forward to advancing CYT387 into a phase III study as quickly as possible and to exploring its potential in other myeloproliferative diseases with significant unmet medical need."
Myelofibrosis is a progressive, chronic bone marrow disorder in which the marrow is replaced by fibrous scar tissue, making it difficult for the bone marrow to sufficiently produce blood cells, leading to anemia (low red blood cell count) and thrombocytopenia (low blood platelet count), severe constitutional symptoms and spleen enlargement. JAK inhibitors modulate cytokine-stimulated intracellular signalling and decrease the circulating levels of proinflammatory cytokines associated with the pathogenesis of myelofibrosis.
"This agreement represents a positive outcome both for myelofibrosis patients and for our shareholders. Gilead has the research and development capabilities and the resources needed to more fully realize the potential of CYT387 as a therapeutic advance for myelofibrosis patients and potentially for other indications," said Dr Nick Glover, president and CEO of YM.
"Since our acquisition of CYT387 nearly three years ago, YM has made great progress in advancing CYT387 through the clinical, regulatory, manufacturing and business development processes. While Gilead's acquisition will end a long, varied and interesting journey for YM, we are pleased to have this transaction crystallize the present value of this important therapeutic candidate," said David Allan, chairman of YM.
In recent years, Gilead has sought to expand its R&D expertise in the area of oncology through the appointment of leading cancer researchers and clinicians, the establishment of external scientific partnerships and through strategic acquisitions. Gilead's lead compound in oncology, idelalisib (formerly referred to as GS-1101), is an investigational, first-in-class specific inhibitor of the phosphoinositide-3 kinase (PI3K) delta isoform. Five phase III studies of idelalisib in chronic lymphocytic leukaemia (CLL) and indolent non-Hodgkin's lymphoma (iNHL) are progressing.
Gilead is also conducting phase II clinical trials of simtuzumab (formerly referred to as GS-6624), an investigational monoclonal antibody (mAb) candidate targeting the human lysyl oxidase-like 2 (LOXL2) protein, in myelofibrosis, colorectal cancer, pancreatic cancer and certain fibrotic diseases.
CYT387, idelalisib and simtuzumab are investigational products and their safety and efficacy have not yet been established.
Under the terms of the agreement, upon closing of the proposed transaction, shareholders of YM will receive US$ 2.95 per common share in cash, and holders of warrants and stock options will receive a cash payment equal to the difference between US$ 2.95 and the exercise price of such warrant or stock option. The proposed transaction will be completed through a plan of arrangement under the provisions of the Companies Act (Nova Scotia).
The transaction will require the approval of YM shareholders at a special meeting of YM shareholders, to be held as soon as reasonably practicable and in any event on or before February 11, 2013. In addition to YM's shareholder approval, closing of the transaction is subject to the satisfaction of certain other customary conditions, including court approval of the transaction, and applicable government and regulatory approvals, including expiration or termination of the waiting period under the United States Hart Scott Rodino Antitrust Improvements Act, and the review period under the Competition Act (Canada). The approval of Gilead shareholders is not required in connection with the proposed transaction.
The arrangement agreement contains customary non-solicitation provisions, but permits YM, in certain circumstances, to terminate the arrangement and accept an unsolicited superior proposal, subject to fulfilling certain conditions.
BofA Merrill Lynch and Bloom Burton & Co. serve as financial advisors, and Gowling Lafleur Henderson LLP, Heenan Blaikie LLP and Dorsey & Whitney LLP serve as legal advisors to YM in connection with the transaction. Gilead is advised by Wilson Sonsini Goodrich & Rosati, Professional Corporation and Blake Cassels and Graydon LLP.
YM BioSciences Inc. is a drug development company primarily focused on advancing CYT387, an orally administered inhibitor of both the JAK1 and JAK2 kinases, which have been implicated in a number of hematological and immune cell disorders including myeloproliferative neoplasms and inflammatory diseases as well as certain cancers.
Gilead Sciences is a biopharmaceutical company that discovers, develops and commercialises innovative therapeutics in areas of unmet medical need.