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Immunomedics' Shares Double on Gilead's $21 Billion Buyout Offer

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Shares of Immunomedics Inc. traded 100% higher after the company reported that it has agreed to be acquired by Gilead Sciences for $88 per share in cash.

Biopharmaceutical company Immunomedics Inc. (IMMU:NASDAQ), which specializes in the area of antibody-drug conjugates and Gilead Sciences Inc. (GILD:NASDAQ) yesterday afternoon announced that "the companies have entered into a definitive agreement pursuant to which Gilead will acquire Immunomedics for $88.00 per share in cash." The companies indicated that the transaction values Immunomedics at approximately $21 billion, is expected to close during Q4/20 and has already been unanimously approved by both company's respective Boards of Directors.

The report noted that "the agreement will provide Gilead with TrodelvyTM (sacituzumab govitecan-hziy), a first-in-class Trop-2 directed antibody-drug conjugate (ADC) that was granted accelerated approval by the U.S. Food and Drug Administration (FDA) in April for the treatment of adult patients with metastatic triple-negative breast cancer (mTNBC) who have received at least two prior therapies for metastatic disease."

Immunomedics is currently planning to submit a supplemental Biologics License Application to support full approval of Trodelvy in the U.S. in Q4/20 and also plans to file for European regulatory approval in H1/21.

Immunomedics noted that "in the Phase 3 ASCENT study, which was halted early due to efficacy based on the unanimous recommendation of the independent Data Safety Monitoring Committee, Trodelvy significantly improved progression-free survival (PFS) and overall survival (OS) in previously treated patients with advanced mTNBC." Trodelvy is also being evaluated and studied for use in several other trials and indications including HR+/HER2- breast cancer, bladder cancer, non-small cell lung cancer and other solid tumor types.

Daniel O'Day, chairman and CEO of Gilead Sciences, remarked, "This acquisition represents significant progress in Gilead's work to build a strong and diverse oncology portfolio. Trodelvy is an approved, transformational medicine for a form of cancer that is particularly challenging to treat. We will now continue to explore its potential to treat many other types of cancer, both as a monotherapy and in combination with other treatments...We look forward to welcoming the talented Immunomedics team to Gilead so we can continue to advance this important new medicine for the benefit of patients with cancer worldwide."

Immunomedics' Executive Chairman Behzad Aghazadeh Ph.D., commented, "We are very pleased that Gilead recognized the value of Trodelvy – both for the important role it has already begun to play for patients with metastatic triple-negative breast cancer and for its potential to help many other patients with cancer in the future...We are excited for the opportunities ahead of us as we join with Gilead to advance our shared mission in defeating cancer. By working with Gilead, we have the opportunity to accelerate our progress and improve care for patients in need of new therapies."

The firms advised that the merger agreement terms stipulate that Gilead, through a wholly owned subsidiary, will commence a tender offer to acquire all of the outstanding shares of Immunomedics' common stock for $88.00 per share. This price reportedly represents a 108% premium to Immunomedics' share closing price on Friday, September 11, 2020. The tender offer is subject to acceptance by at least a majority of outstanding Immunomedics shares and other customary closing conditions as well as necessary regulatory approvals. Gilead indicated that it will fund the purchase by utilizing approximately $15 billion in cash on hand and the remaining $6 billion will come proceeds from newly issued debt.

The company explained that "Trodelvy (sacituzumab govitecan-hziy) is a Trop-2 directed antibody-drug conjugate indicated for the treatment of adult patients with metastatic triple-negative breast cancer (mTNBC) who have received at least two prior therapies for metastatic disease."

Immunomedics is a clinical-stage biopharmaceutical company headquartered in Morris Plains, N.J., that this focused on developing and advancing monoclonal antibody-based products for targeted cancer, autoimmune and other serious disease treatments.

Gilead, headquartered in Foster City, Calif., is a research-based biopharmaceutical company with operations in more than 35 countries. The company focuses on four primary therapeutic areas: HIV, Liver disease, Oncology and Inflammation.

Immunomedics started off the day with a market capitalization of around $9.8 billion with approximately 231.1 million shares outstanding and a short interest of about 11.3%. IMMU shares opened 105% higher today at $86.89 (+$44.64, +105.66%) over Friday's $42.25 closing price and reached a new 52-week high price this morning of $86.91. The stock has traded today between $83.68 to $86.91 per share and is currently trading at $84.10 (+$41.84, +99.04%).


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