Gilead Sciences, Inc. (NASDAQ:GILD) and Sanofi SA (ADR) (NYSE:SNY) are reportedly competing against each other to acquire TESARO Inc (NASDAQ:TSRO) in which the winner will have access to Zejula.
Gilead Sciences expressed its interest in acquiring Massachusetts-based pharmaceutical company Tesaro, but it is facing some competition from Sanofi which has similar interests. The target firm deals in the development and manufacture of drugs that address cancer which is one of the reasons why it is highly coveted by the other two biotech giants. The firm that will successfully acquire Tesaro will gain access to PARP inhibitor called Zejula that was given the go-ahead for ovarian cancer treatment.
Details about the possible acquisition
Tesaro is reportedly valued at about $10 billion, which is equivalent to $185 per share. This means that its acquisition will be a major one. Both Sanofi and Gilead have experienced tough times over the past year due to low sales.
Sanofi’s hepatitis B franchise has not been at its best, thus leaving the company frustrated. Gilead Sciences on the other hand, experienced poor sales in 2016 with its major hepatitis C treatments, namely Harvoni, and Sovaldi. Acquiring Tesaro therefore makes some sense for either of the two firms because the firm that manages to secure the acquisition deal will get access to Zejula. The drug will offer a significant boost in revenue.
Zejula is considered the best alternative for ovarian cancer treatment and it is also more affordable than similar treatments from other companies. The similar treatments include Lynparza from AstraZeneca plc (ADR) (NYSE:AZN) and Rubraca, produced by Clovis Oncology Inc (NASDAQ:CLVS). Zejula is also the broadest drug of the three and it can be used to treat patients regardless of their genetic orientation.
Gilead stock closed the latest trading session on Monday at $60.09.