Deal making has slowed since Donald Trump became US president, as several drug-makers have been waiting for more clarity on drug pricing and tax reform. The volatile industry trend is reflected also in the M&A activity, which in 2016 was at the lowest level in six years. Despite the stable growth, biotech companies have always operated in a world of uncertainty brought about by an unstable customer engagement and an unpredictable regulatory compliance, in an environment where cost and pricing may make the difference and where clinical and operational innovations are the key to growth and success. The biotechnology sub-industry is divided into agricultural and medical biotech, but the latter, with revenues exceeding $150bn annually, receives the major part of research funds. Furthermore, the global biotech revenue is expected to rise to $314.7bn by 2021. This figure is not expected to grow in the near term: as a matter of fact, this value is expected to reach $8.7 trillion (10.5% of GDP) by 2020.Īt the same time, overall the biotechnology segment’s revenues increased at a 3.7% CAGR, from $263.7bn to $293.5bn, between 20. Globally, in 2015 health-care spending was 10.4% of GDP.
KITE PHARMACEUTICALS STOCK DRIVER
Moreover, another potential growth driver includes improved economic activity in the Middle East and APAC. The recent growth in the sector is closely tied to global health care expenditures which, in 2017 and successive years, are expected to be fueled by increasing demand from an aging population and by the prevalence of chronic and communicable diseases. As a consequence, the Nasdaq Biotechnology Index fell 21% in 2016, but has regained ground in 2017, climbing 11%. In the last few years the Pharmaceutical industry has been struggling with several challenges and, in particular, the major contributor to the realized volatility was the political framework. R&D expenses – an important indicator for the firms operating in this sector if we consider that pharmaceutical industry spends more on research and development, relative to its sales revenue, than almost any other industry in the US – amounted to $76.4m in 2015 and increased to $197.9m for the year ended 2016. However, their losses have been increased from $101m in 2015 to $267m in 2016. The company has been successful in developing a drug that uses the white-blood cells of the human body to fight the tumor. The clinical-stage biopharmaceutical company is based out of Santa-Monica, California. was founded in 2009 by an Israeli-American oncologist, Arie Belldegrun. Over the years, the number of Americans affected by Hepatitis C have been declining and this, together with fierce competition in the sector, has cause the company to struggle in the past years. At a certain point, Gilead was selling its hepatitis C drug for $1,000 per a combo, which was a daily dosage. Gilead had previously bet successfully its money on Pharmasset, which at that time had an experimental hepatitis C treatment. Historically, the company has made many acquisitions and has been successful in converting such acquisitions into valuable cash generating units. In 2002, Gilead sold its cancer assets to OSI Pharmaceuticals and changed its corporate strategy to focus on antivirals. Gilead debuted on the NASDAQ in January 1992 and its IPO raised $86.25 million in proceeds. Its shares trade among the NASDAQ Biotechnology Index and the S&P 500. Gilead is a biopharmaceutical company headquartered in Foster City, California that was founded in 1987. The transaction will provide opportunities to the buyer for diversification of revenues, and is expected to be neutral to earnings by year three and accretive thereafter. The deal, which established Gilead as a leader in cellular therapy, is anticipated to close in the fourth quarter of 2017. Kite was valued at approximately $11.9 billion and this deal was unanimously approved by both the Gilead and Kite Boards of Directors.
announced that the companies have entered into a definitive agreement pursuant to which Gilead will acquire Kite for $180 per share in cash. On August 28, 2017, Gilead Sciences, Inc. Gilead Sciences (NASDAQ:GILD) – Market cap as of : $108.74bn Kite Pharma (NASDAQ:KITE) – Market cap as of : $10.28bn
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