Gilead acquired KITE pharmaceuticals in August of 2017. Gilead has been struggling with organic growth and was looking to expand it’s drug pipeline and portfolio through this acquisition. KITE focuses mainly on oncology while Gilead focuses mainly on infectious diseases. Gilead paid $11.9 billion for KITE pharmaceuticals. (Gilead Acquisitions. (2017, August 28) This is interesting because at the time of acquisition KITE only had sales of $30 million for 2017. (Pillars of Wallstreet. (n.d.) This is particularly interesting because it shows that Gilead is really betting that in the long term KITE’s drug development technology will pay off. Gilead was and still is sitting on a pile of cash and investors were getting frustrated that Gilead wasn’t utilizing it so they felt pressured to make a large acquisition.
As somebody who has a direct family member in which KITE pharmaceutical’s novel potential drug pipeline might help, I think Gilead made the acquisition just to appease investors and “get them off their back” so to speak. The treatment’s called CAR-T are not fully proven to be effective and safe. I get a daily update on CAR-T therapy as a potential cure for cancer and it so far it doesn’t seem to do so. However, this is also why Gilead made such a big bet on KITE pharmaceuticals is because the potential for a cure even though they don’t have much revenue at all.
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