Arie Belldegrun of Kite Pharma

Arie Belldegrun of Kite Pharma Photo by Christopher Galluzzo/Nasdaq OM

Gilead Sciences and Kite Pharma Acquire Cell Design Labs

By DANA BARTHOLOMEW Staff Reporter

Biotech giant Gilead Sciences Inc. and its Kite Pharma Inc. subsidiary in Santa Monica are buying Cell Design Labs Inc. for up to $567 million as the battle to develop cancer-targeting cell therapies heats up.

Gilead of Foster City, which bought Kite Pharma in August for $12 billion, said Thursday the deal to acquire the Emeryville-based lab would close shortly.

“The transaction will build on Gilead’s recent acquisition of Kita Pharma Inc. and has the potential to help the Gilead and Kite organizations accelerate the development of next generation cellular therapy candidates,” the companies said in a joint news release.

The transaction includes an up-front payment of $175 million, plus added payments of $322 million upon meeting certain milestones. About 12.2 percent of shares in Cell Design held by Kite are included as part of the deal.

Among Cell Design Labs’ chief investors and board members is Los Angeles biotech maverick Dr. Arie Belldegrun, founder of Kite Pharma and now a major advisor.

The acquisition strengthens Gilead’s position as developer of chimeric antigen receptor T-cell therapy (CART-T) drugs, a new class of treatments that transform a patient’s immune cells to target cancer.

In October, Kite won federal approval for a Yescarta CAR-T treatment for adults with non-Hodgkin’s lymphoma. In August, competitor Novartis AG won federal approval for the first cell-based cancer treatment in the U.S. for acute leukemia.

Cell Design will bring to the Gilead fold two tech platforms that can be applied to cell therapy and early stage treatments for prostate cancer and a type of blood cancer.

Health business reporter Dana Bartholomew can be reached at dbartholomew@labusinessjournal.com. Follow him on Twitter @_DanaBart.