Gilead Sciences Inc. agreed to buy CV Therapeutics Inc. for about $1.4 billion to gain chest-pain and heart drugs, topping a hostile offer from Japan’s Astellas Pharma Inc.
Gilead, based in Foster City, California, will pay $20 a share for CV Therapeutics, of Palo Alto, California, the companies said today in a statement. The offer beats a $16-a- share bid from Astellas, which began a tender offer on Feb. 27 after rejections by the CV Therapeutics board. Gilead said it will pay from cash on hand without financing.
The deal will help Gilead, the biggest U.S. supplier of AIDS drugs, expand into the $50 billion annual worldwide market for heart-disease treatments. Gilead gains CV Therapeutics’ chest pain drug Ranexa. Gilead markets two hypertension treatments, Letairis and Flolan, and is in final human tests of another called darusentan.
“This is a good strategic fit for Gilead, as the company would gain both Ranexa and a CV sales force that can also detail darusentan,” said Bret Holley, an analyst at Oppenheimer & Co. in New York, in a note to clients today.
CV Therapeutics rose $4.60, or 29 percent, to $20.60 at 1:32 p.m. in Nasdaq Stock Market composite trading. Gilead’s offer represents a 25 percent premium over CV Therapeutics’ closing price yesterday. Gilead fell 85 cents, or 1.9 percent, to $43.19.
CV Therapeutics’ board said the $16-a-share offer “significantly undervalues” the company. Astellas, Japan’s second-largest drugmaker, said last week it would seek to oust every CV Therapeutics board member to press its bid.
“Astellas has said that $16 is fairly valued, but they have implied that they’d be willing to negotiate,” said Mark Gardyn, an analyst for Oscar Gruss & Son in New York. “It’s certainly possible they’d come back with another offer.”
Ranexa had sales of $109.3 million in 2008. It first was sold in 2006. The drug got a boost in November when U.S. regulators approved it as an initial treatment for chronic chest pain, broadening its potential use.
Gilead said CV Therapeutics may use its experience with Ranexa to help win a broader label for darusentan, the experimental hypertension medicine. Gilead said it will release results from large human trials of darusentan in the second quarter of this year.
Merrill Lynch & Co. served as Gilead’s financial adviser, while Goldman, Sachs & Co. and Barclays Capital advised CV Therapeutics.
Gilead used Cooley Godward Kronish LLP as legal counsel and Latham & Watkins LLP is serving as legal counsel to CV Therapeutics.