Gilead Wins CV Therapeutics Bid; Higher Bid Coming? (GILD, CVTX)

Health and Healthcare

Published: March 12, 2009 8:10 am

Last Updated: April 27, 2020 10:06 pm

money-stack-image25 Gilead Sciences, Inc. (Nasdaq: GILD) has agreed to buy CV Therapeutics, Inc. (Nasdaq: CVTX) for $20.00 per share in cash.

This deal is via a tender offer and second step merger. The board has agreed to recommend to its stockholders to tender their shares. This is interesting because CV’s board had fought off a $16.00 buyout from Astellas.

The transaction is valued at approximately $1.4 billion. Gilead believes it will be dilutive to 2009 earnings, will be neutral or accretive to 2010 earnings, and will be accretive to earnings in 2011 and beyond.

CV Therapeutics focuses on the development of small molecule drugs for the treatment of cardiovascular diseases. In 2008, its Ranexa and Lexiscan contributed to total revenue of $154.5 million. It also has a pipeline which includes multiple product candidates in evaluation stages for the treatment of atrial fibrillation, pulmonary diseases and diabetes.

The tender is subject to to a majority tender of holders and to regulatory approval. These should go through. Where this gets really interesting is that the stock is trading up at $20.40 in pre-market trading. Some are wondering if Astellas will come knocking on the door again.

JON C. OGG

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