Gilead will gain access to a late-stage pulmonary arterial hypertension drug candidate, ambrisentan, through its planned acquisition of Myogen. The biopharmaceutical company announced plans to buy Denver-based Myogen for approximately $2.5 bil. Oct. 2.

"Our planned acquisition of Myogen represents both a scientific and strategic fit," President and CEO John Martin stated during a same-day conference call. "The acquisition allows us to build off our recent acquisition of Corus, expanding our knowledge and focus in pulmonology."

The acquisition is the second for Gilead in the therapeutic area this year, as the company has looked to supplement its infectious disease portfolio, which includes HIV therapies Atripla , Truvada and Viread .

In July, Gilead announced plans to buy Corus Pharma to focus on respiratory disease. The lead candidate from Corus is Cayston (aztreonam lysine) an inhaled treatment for cystic fibrosis patients with Pseudomonas aeruginosa infection (¹ Also see "Gilead Acquisition Of Corus Adds Respiratory Disease Candidate" - Pink Sheet, 21 July, 2006.).

The addition of Myogen will give Gilead a later stage candidate in respiratory disease. Myogen is planning to submit an NDA for ambrisentan in the fourth quarter, supported by data from two pivotal Phase III studies. The endothelin receptor antagonist has been granted orphan drug status for an indication in PAH by FDA. GlaxoSmithKline has marketing rights to the drug outside of the U.S.

Ambrisentan represents an opportunity to meet an unmet medical need, Gilead said. Actelion's Tracleer (bosentan) is currently the only endothelin receptor antagonist approved by FDA for PAH.

"This represents a significant and growing commercial opportunity," Martin said. "We believe that ambrisentan has the potential to be the best product in the endothelin receptor class, based on its efficacy and safety profile and lack of drug-drug interactions."

Gilead said it sees potential sales for the drug coming both through patient switches and by increasing the number of patients diagnosed with the disease. It is currently estimated that only 30% of the 88,000 patients with PAH in the U.S. are diagnosed, the firm reported.

"We believe we have a product with a stronger profile [than Tracleer]," Exec VP-Commercial Operations Kevin Young said. However, "as we have done in both hepatitis and HIV, we always consider as a leading company [that] part of our role is to develop the market. We think there is an opportunity for quite significant growth in PAH just by increasing the diagnosis of patients."

Gilead could face additional competition in the category from Encysive, which is currently working out issues with its PAH candidate Thelin (sitaxsentan) with FDA. Although approved for marketing in the European Union in August, the drug received a second "approvable" letter from FDA in July (² Also see "Encysive Holds Hope For Thelin Despite Receiving Second “Approvable” Letter" - Pink Sheet, 25 July, 2006.).

Under terms of the agreement between Gilead and Myogen, Gilead will pay $52.50 per Myogen share, a 50% premium over the closing price of the company Sept. 29. The deal is expected to be dilutive to Gilead's earnings in 2007 and 2008, neutral in 2009 and accretive in 2010 and beyond.

Gilead CFO John Milligan said Myogen was worth the $2.5 bil. price tag because there is a scarcity of valuable late-stage drug candidates for sale that are supported by positive Phase III data.

The deal will also give Gilead access to Flolan (epoprostenol), an intravenous treatment for primary pulmonary hypertension, which Myogen markets and distributes in the U.S. under an agreement with GSK.

Myogen's pipeline also includes darusentan, an endothelin receptor antagonist for the potential treatment of resistant hypertension in Phase III.

-Jessica Merrill (j.merrill@elsevier.com)

Gilead Buys Myogen To Strengthen Pulmonology Franchise

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