Gilead Sciences is acquiring biotech company CymaBay Therapeutics in a $4.3 billion deal that comes with a drug candidate currently under FDA review in a rare liver disease with few treatments.
According to deal terms announced Monday, Gilead will pay $32.50 cash for each share of CymaBay. That price is a 27% premium to CymaBay’s closing stock price on Friday. The acquisition marks a comeback for the company and its drug, which just a few years ago faced an uncertain future amid safety questions.
The main asset of CymaBay is seladelpar, a drug that the Newark, California-based company has developed for treating primary biliary cholangitis (PBC), a rare and progressive autoimmune condition that destroys the bile ducts of the liver. But this small molecule was at one time among the leading drug candidates for nonalcoholic steatohepatitis (NASH), a fatty liver disease that has no FDA-approved treatments.
In 2019, a safety signal led CymaBay to stop a mid-stage test of seladelpar in NASH as well as a recently started study in primary sclerosing cholangitis, another chronic liver disorder. The FDA subsequently placed a formal clinical hold on the drug. The hold also stalled the development of the drug in PBC. The FDA cleared the company to resume testing of the drug in 2020, but CymaBay elected to continue development only in PBC.
PBC is a chronic disorder that mainly affects women over the age of 40, impairing liver function. Common early symptoms include severe pruritus (itching) and fatigue. PBC can progress to cirrhosis and liver failure. The first-line drug treatment for PBC is ursodeoxycholic acid, or ursodiol, an old drug for dissolving gallstones that in 1996 won an additional approval as a treatment for PBC. The Intercept Pharmaceuticals drug Ocaliva was approved in 2016 as a second-line therapy for PBC.
CymaBay’s seladelpar is a small molecule designed to bind to and activate peroxisome proliferator activated receptor delta (PPAR delta), a receptor that regulates genes involved in the synthesis of bile acids, metabolism, inflammation, and fibrosis. In its placebo-controlled Phase 3 clinical trial, results showed treatment with the drug led to statistically significant normalization of enzymes indicative of liver disease as well as improvement in pruritus. Late last year, CymaBay submitted a new drug application seeking approval of seladelpar as a treatment for patients who are inadequate responders to or intolerant of ursodiol. CymaBay announced Monday that the FDA will evaluate the application under priority review, setting an Aug. 14 target date for a regulatory decision.
Gilead’s portfolio of liver disease drugs include the hepatitis B drugs Vemlidy and Viread as well as hepatitis C drug Harvoni. The Foster City, California-based drugmaker is also in the chase for NASH (now also called MASH, for metabolic associated steatohepatitis) with cilofexor and firsocostat, which are in Phase 2 testing as part of a combination treatment with Novo Nordisk’s semaglutide.
“Building on the strong research and development work by the CymaBay team to date, we have the potential to address a significant unmet need for people living with PBC and expand on our existing broad range of transformational therapies,” Gilead Chairman and CEO Daniel O’Day said in a prepared statement.
CymaBay licensed seladelpar from Johnson & Johnson in a 2006 deal. If it’s approved, J&J is in line to receive royalties from sales. The CymaBay pipeline also includes MBX-2982, a molecule in Phase 2a testing for treating hypoglycemia in patients with type 1 diabetes.
In a note sent to investors, William Blair analyst Andy Hsieh wrote that the CymaBay acquisition validates the clinical performance and commercial potential of seladelpar in PBC. He called the acquisition “poetic closure” for the company following the molecule’s previous clinical trial setbacks
“We commend management’s resilience and persistence that ultimately led to seladelpar demonstrating the best-in-class clinical profile in PBC, and we expect the drug to benefit thousands of patients living with PBC as soon as later this year,” Hsieh said.
Hsieh said the Gilead offer is fair and it is unlikely another bidder will emerge. The transaction requires the majority of CymaBay shareholders to tender their shares. The companies expect to close the transaction in the current quarter.
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