Gilead Sciences Inc.’s acquisition of Kite Pharma Inc. of Santa Monica for $12 billion was the headline-grabbing deal for the Los Angeles County biotech industry in 2017.
The Foster City-based biotechnology giant swallowed up the privately owned maker of genetic cancer treatments in a transaction that closed Oct. 3.
Gilead agreed to purchase Kite on Aug. 28, paying $180 per share for the company in an all-cash deal valued at $11.9 billion. The price point was 29.4 percent per share premium over Kite’s last closing price on Aug. 25.
The firm is now operated as a subsidiary, Kite: a Gilead Co., and remains in Santa Monica, moving recently to larger headquarters while also adding 200 jobs to the roughly 750 employed at the time of the takeover.
“The bottom line is that after years of trying to bring a true biotechnology industry to Los Angeles, we have been successful in attracting a powerhouse like Gilead, a $100-billion-dollar-plus company that prides itself on basic research, basic understanding of molecular events and translated so effectively to drugs that cure diseases,” said Kite founder and Chief Executive Arie Belldegrun.
The company was the third big exit by a Los Angeles-based biotech company run by Belldegrun, who stood to make about $600 million off the sale of Kite alone. The serial entrepreneur also sold Cougar Biotech in 2009 for $1 billion and Agensys in 2007 for $570 million.
The size of the sale to Gilead stunned the biotech industry, and cast a national spotlight on an emerging bioscience sector in Los Angeles, with a market now valued at $40 billion.
The deal also gave the Bay Area drug maker, best known for its costly treatment of hepatitis C and aging treatments for HIV, a leg up in an emerging field of immunotherapy. Kite’s cancer fighting therapy harnesses the body’s immune system to attack malignant cells.
Two weeks after the sale, the U.S. Food and Drug Administration approved Kite’s Yescarta CART-T treatment for adults with non-Hodgkin’s lymphoma. The treatment costs $373,000 per patient and is expected to generate billions in sales.
“The acquisition of Kite establishes Gilead as a leader in cellular therapy and provides a foundation from which to drive continued innovation for people with advanced cancers,” said John Milligan, Gilead’s chief executive, in a statement.
– Dana Bartholomew
