Gilead (GILD) Should Buy This Company

The investment bank Evercore ISI surveyed 244 biotech industry observers. The primary goal was for them to identify the biotech company they thought mostly likely to be acquired in the next year and who they thought should buy it. Incyte (INCY) was the top pick for an acquisition target, and Gilead Sciences (GILD) won out as their choice to buy Incyte. Keith Speights, writing for The Motley Fool, considers such a deal.

This isn’t exactly a new idea. In September, Ken Kam, writing for Forbes, talked to Todd Hagopian, who has a biotech fund at Marketocracy, on who he thought Gilead should buy and Incyte was one of the four he suggested. The others were Puma Biotechnology (PBYI), Kite Pharma (KITE), and Portola Pharmaceutical (PTLAN). Incyte has also been floated as an acquisition target for Amgen (AMGN) and Shire (SHPGY).

Incyte has two products on the market, Jakafi and Iclusig. Jakafi is a JAK1 and JAK2 inhibitor to treat polycythemia vera. In May, the company acquired the European rights to leukemia drug Iclusig from Ariad Pharmaceuticals (ARIA).

Speights writes, “Jakafi and Iclusig might not seem to be a great match for Gilead at first glance. The big biotech is best known for its hepatitis C and HIV franchises. However, Gilead has been deliberately branching out beyond those indications.”

Gilead currently has only one commercial cancer drug, Zydelig, for relapsed chronic lymphocytic leukemia (CLL), non-Hodgkin lymphoma (NHL) and relapsed small lymphocytic lymphoma (SLL). But it does have eight drugs in clinical trials for hematology and oncology indications. Three are in Phase III trials. So if those should make it to the market, Jakafi and Iclusig would be assets in a growing oncology portfolio.

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