Gilead to acquire Myogen for $2.5 billion

NEW YORK - Gilead Sciences Inc. (GILD.O: Quote, Profile, Research), one of the world's biggest biotechnology companies, said on Monday it agreed to acquire tiny Myogen Inc. (MYOG.O: Quote, Profile, Research) for $2.5 billion to gain control of its promising hypertension drugs.

The transaction, the latest in a flurry of acquisitions in the drug and biotechnology sector, will give Gilead access to Myogen's experimental drugs ambrisentan to treat pulmonary arterial hypertension, or PAH, and darusentan for treating high blood pressure.

PAH causes extreme shortness of breath as the heart struggles to pump against high blood pressure in the lungs.


Foster City, California-based Gilead agreed to acquire all of Myogen's common stock at $52.50 per share, or a 50 percent premium to Myogen's closing stock price on Friday of $35.08. Myogen's shares rose 48 percent to $52.06 in pre-market trading.

Myogen is expected to seek approval for ambrisentan by the end of the year. The company is in a race with Encysive Pharmaceuticals Inc. (ENCY.O: Quote, Profile, Research) to produce a drug for PAH that can compete with Tracleer, a rival made by Actelion (ATLN.S: Quote, Profile, Research).

Encysive received a blow in July when U.S. regulators again asked for more information about its experimental PAH drug Thelin, before agreeing to approve it.

Geoffrey Porges, an analyst at Sanford Bernstein, said he expects ambrisentan to generate more than $1 billion a year, if approved, but he questioned the price of the deal and Gilead's rationale for the acquisition.


WHAT IS PH?
A condition in which blood pressure in the arteries of the lungs (pulmonary arteries) is abnormally high.

Blood travels from the right side of the heart through the pulmonary arteries into the lungs. There, carbon dioxide is removed from the blood and oxygen is added to it. Normally, the right side of the heart is weaker than the left side, because relatively little muscle and effort are needed to push the blood through the pulmonary arteries. In contrast, the left side of the heart is stronger and more muscular because it has to push blood through the entire body. Likewise, blood pressure through the pulmonary arteries is lower than that of the general circulation.

If the pressure of the blood in the pulmonary arteries is abnormally high, the condition is called pulmonary hypertension. Over time, the increased pressure damages both the large and small pulmonary arteries. The walls of the smallest blood vessels thicken and are no longer able to transfer oxygen and carbon dioxide normally between the blood and the lungs. Thus, the levels of oxygen in the blood may fall. The low oxygen level can cause narrowing (constriction) of the pulmonary arteries. These changes contribute further to the increased pressure in the pulmonary circulation.

With pulmonary hypertension, the right side of the heart must work harder to push the blood through the pulmonary arteries into the lungs. Over time, the right ventricle becomes thickened and enlarged, leading to a condition called cor pulmonale. Heart failure develops.