Gilead Sciences to buy CGI Pharmaceuticals for up to $120 million

Gilead Sciences Inc. yesterday said that it is acquiring privately held development-stage pharmaceutical company CGI Pharmaceuticals for up to $120 million, the latest in a recent flurry of drug-industry mergers and deals.

CGI, based in Branford, Connecticut, has generated a library of proprietary small molecule kinase inhibitors. The lead preclinical compound from this library targets spleen tyrosine kinase (Syk) and could have unique applications for the treatment of serious inflammatory diseases, including rheumatoid arthritis.

CGI is backed by investors like MPM Capital, Flagship Ventures, Vector Fund Management, Coastview Capital, Vantage Point Venture Partners, Lilly BioVentures, RiverVest Venture Partners, CHL Medical Partners, Connecticut Innovations, Oxford Bioscience Partners, and Emerging Technology Partners.

Under the terms of the agreement, Gilead will acquire CGI for up to $120 million, the majority as an upfront payment and the remaining based on clinical development progress, all of which will be financed through available cash on hand, said the Foster City, California-based Gilead.

Gilead anticipates that the deal would close in the third quarter of 2010, subject to satisfaction of certain closing conditions. After closing, CGI will continue operations in Branford as a wholly-owned subsidiary of Gilead.

"The acquisition of CGI represents a unique opportunity to expand our research efforts in an interesting and promising area of drug discovery," said Norbert Bischofberger, PhD, Gilead's executive vice president, Research and Development and chief scientific officer.