Gilead Buying Kite for $11.9 Billion

Gilead Sciences, a Foster City, CA–based company with only one approved oncology asset, announced on August 28that it will pay $11.9 billion to acquire Kite Pharma, headquartered in Santa Monica, CA. Kite is developing engineered autologous chimeric antigen receptor (CAR) T-cell therapies to treat multiple cancers, and one, an anti-CD19 product called axicabtagene ciloleucel (axi-cel), could soon be approved by the FDA to treat non-Hodgkin lymphoma.

The deal legitimizes a bespoke cancer treatment strategy that, until recently, few large drugmakers pursued. “Big pharma is recognizing the value in what previously they had shunned,” says Ronald Dudek, director of technology development and marketing at Lentigen Technology in Gaithersburg, MD, and a consultant on CAR T-cell therapy development. “Having Novartis jump in in 2012 was a huge boost for the field, and now the Gilead acquisition of Kite further validates the commercialization of this technology [Cancer Discov 2012;2:OF10].”

The sale will also build Gilead's slim oncology portfolio and boost revenue because a CAR T-cell therapy will cost hundreds of thousands of dollars. However, given the attendant risk of life-threatening cytokine release syndrome, “it's going to take a relatively sophisticated approach to develop the market for such a high-potential, but high-risk, therapy,” says Jerry Cacciotti, an expert in healthcare R&D strategy at A.T. Kearney in San Francisco, CA. “The last thing you want to do is push the commercialization too fast,” he adds. “That could really poison the well.”

Gilead has dabbled in cancer drug development in the past. In 2000, the company launched a phase II trial of a topoisomerase I inhibitor for ovarian cancer. A year later, however, it sold all of its oncology products and patents, choosing to focus on infectious diseases. In 2007, the company started trials of a prodrug of the nucleotide analog PMEG for hematologic malignancies, but soon abandoned the program due to safety concerns.

Gilead's first significant success in oncology came in 2014 with the approval of idelalisib (Zydelig), a PI3K inhibitor, as a second-line treatment for three B-cell blood cancers. “From the standpoint of efficacy, it's a very, very good drug,” says Steven Coutre, MD, of Stanford University Medical Center in Stanford, CA, who led trials of the agent.

However, serious side effects limited further development of the drug—and its clinical use. “Idelalisib has not really gotten off the ground in CLL [chronic lymphocytic leukemia],” says Jeff Sharman, MD, of the Willamette Valley Cancer Institute in Springfield, OR, who consults for Gilead. Neil Kay, MD, of the Mayo Clinic in Rochester, MN, agrees: “The bloom is off the rose.”

What's left in the company's clinical-stage oncology pipeline is an MMP9-targeted antibody currently in phase III testing for gastric cancer; a SYK inhibitor and a BTK inhibitor, each in phase II trials for hematologic malignancies; and a few candidates in phase I testing.None of these investigational drugs are considered practice-changing—unlike axi-cel.

If approved, axi-cel could generate annual sales approaching $2 billion, according to analyst projections. That figure is probably not high enough to justify the purchase price to stock analysts' satisfaction, says Anthony Walker, PhD, a managing partner at Alacrita, a consulting firm in London, UK. However, “as a strategic move for the long term, it could be brilliant,” he says, “provided that Gilead invests in developing not just the next generation of CAR-T [therapies] but the generation or two after that.” –Elie Dolgin

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