(By Balachander) Gilead Sciences Inc. (NASDAQ: GILD) agreed to acquire Canadian drug developer YM BioSciences Inc. (NYSEAMEX: YMI) for US$2.95 per share in cash in a move to strengthen its oncology portfolio.
The deal, which values YM at roughly US$510 million, represents a premium of 81 percent to the stock's previous closing price.
YM shares surged 78.5 percent in early trade on Wednesday, while GILD stock traded 0.52 percent higher.
YM BioSciences is primarily focused on advancing CYT387, an orally administered inhibitor of the Janus kinase (JAK) enzymes, which have been implicated in a number of disorders including myeloproliferative and inflammatory diseases as well as certain cancers.
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Mississauga-based YM has reported positive results from a Phase 1/2 clinical trial of CYT387 in 166 patients with myelofibrosis, a progressive, chronic bone marrow disorder .
"Based on promising Phase 2 data, we believe CYT387 could provide important clinical benefit for patients with myelofibrosis, including potential improvements with regard to anemia and decreased dependence on blood transfusion," Foster City, California-based Gilead said.
Gilead said it plans to start a late-stage trial of CYT387 in myelofibrosis in the second half of 2013, pending completion of the deal. Gilead said it is also exploring its potential in other myeloproliferative diseases with significant unmet medical need.
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The deal is expected to be completed in the first quarter of 2013.