Gilead Sciences, Inc. (NASDAQ: GILD)
Gilead Sciences is a major player in the biotech space. With a strong hold on the hepatitis C and HIV markets, there’s already plenty of reasons for investors to get excited about the stock. However, yesterday, we learned of a new reason! Gilead Sciences has entered into an agreement to acquire the privately held EpiTherapeutics. Today, we’ll talk about the details of the acquisition, why GILD wants to acquire the company, and what it could mean for Gilead Sciences in the future.
Acquisition Price & EpiTherapeutics Details
Gilead Sciences announced that the acquisition price for the Denmark-based firm will come in at $65 million. EpiTherapeutics is a firm that’s involved in the development of cancer drugs that use enzymes which are known to be involved in the regulation of multiplication of cancer cells.
Why Would Gilead Want To Acquire EpiTherapeutics?
As mentioned above, EpiTherapeutics focuses on the development of cancer drugs. So, essentially, the acquisition will give Gilead the ability to enter the cancer market. Considering that the company has conquered the HCV and HIV markets, it’s time for the company to branch out. So, why the cancer market?
- Huge Potential For Profits – The cancer treatments industry is already massive. In the year 2014, more than $100 billion was spent on the treatment of cancer; and that’s a number that’s growing pretty rapidly. As a matter of fact, by 2018, cancer treatment is expected to be a $147 billion per year industry.
- A Shot Back To AbbVie – AbbVie Inc. (NYSE: ABBV) and Gilead Sciences have been in a bit of a price war lately. AbbVie recently released their own HCV treatment that’s proving to do relatively well in the market (even with ridiculous side effects) because of the lower pricing than seen on GILD’s treatment. Considering the fact that AbbVie recently acquired Pharmacyclics, Inc. (NASDAQ: PCYC) in a $21 billion deal, GILD is getting it’s revenge on the company with their acquisition. Sure, this isn’t the reason they want the acquisition to happen, but it is a bit ironic…don’t you think?
What This Could Mean For Gilead Sciences In The Future
There’s no doubt that Gilead Sciences has already proven its ability to take control of an entire industry in the medical space. They did it with HCV, they did it with HIV, and now, they will likely play a major role in the treatment of cancer some time down the road. If you follow my writing, you know I’m already a huge GILD fan. However, now the stock just got more attractive. Based on everything I know about GILD I’m expecting to see massive long term gains!
What Do You Think?
Where do you think GILD is headed in the long run and why? Let us know in the comments below!