The acquisition signals Gilead’s intentions to move into small molecule drug discovery, an area in which small molecule therapeutics is expected to gain most progress in inflammation and cancer therapies.
Small molecule drugs currently dominate central nervous system and infectious disease treatments and biotech firms such as Genentech currently have a pipeline that emphasises therapeutics in the oncology and immunology areas.
The agreement comes as a selection of drug producers have been making licensing deals with drug developers in an attempt to shore up their pipelines. Under the terms of the agreement, Gilead will pay CGI for up to $120 million, split between a substantial upfront payment and the rest as milestone instalments.
Gilead said the deal would be completed sometime on the third quarter this year, with CGI continuing to trade as a subsidiary of Gilead.
CGI now joins Corus Pharma as a company that falls under Gilead’s stable. Four years ago Gilead committed $365 million to purchase a stake in the company, acquiring the rights to Cayston (aztreonam), a treatment for cystic fibrosis patients.
Perhaps Gilead’s biggest coup was the $1.4 billion deal to buy CV Therapeutics in March last year. However the deal, which was meant to be Gilead’s grand entrance into the $50 billion worldwide market for heart-disease treatments, buckled under the regulatory spotlights as CV’s hypertension contender darusentan, failed during Phase III.
“The acquisition of CGI represents a unique opportunity to expand our research efforts in an interesting and promising area of drug discovery,” said Norbert Bischofberger, Gilead’s Executive Vice President, Research and Development and Chief Scientific Officer.
“CGI has established itself in the area of protein kinase biology and small molecule discovery, and represents a strong strategic fit with Gilead’s existing research organisation,” he added.
Compared to previous deals, $120 million for CGI, would be considered a small fry, with a long-term outlook clearly within Gilead’s current thinking. Although CGI have generated a library of promising small molecule kinase inhibitors, they are at too early a stage to progress onto treatments with an immediate impact.
However, the lead preclinical compound from its library targets spleen tyrosine kinase (Syk) and has shown promise in the treatment of serious inflammatory diseases, such as rheumatoid arthritis.
In February this year, UK-based AstraZeneca shelled out $100 million for a Syk inhibitor drug candidate from Rigel Pharmaceuticals. The drug, which had just completed Phase II testing, was at the centre of the deal that would give Rigel access to a potential $1 billion in milestone payments.