AstraZeneca Proposes Merger to Gilead... If Successful, Largest Merger in Pharmaceutical Industry Expected

[Image source=Reuters Yonhap News]

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] British pharmaceutical company AstraZeneca has reportedly proposed an acquisition of the American pharmaceutical company Gilead Sciences. If the merger is successful, it is expected to be the largest merger in the pharmaceutical industry. Amid the growing importance of pharmaceutical companies due to the COVID-19 pandemic, significant progress is anticipated in the fields of COVID-19 treatment and vaccines.

On the 7th (local time), Bloomberg News reported, citing sources, that AstraZeneca proposed a merger to Gilead last month. Official discussions have not yet taken place, and no specific deal terms have been presented, suggesting that the proposal was made to gauge interest. Sources told Bloomberg that Gilead has entered internal discussions but no decisions have been made so far.

Regarding this, AstraZeneca stated to Bloomberg, "We will not comment on rumors or speculation." Gilead declined to respond. Sources also conveyed that Gilead currently shows more interest in partnerships or smaller acquisitions rather than a large-scale acquisition.

Bloomberg reported that if the merger between the two companies is completed, it would be the largest deal in the industry’s history. Bloomberg evaluated, "It is expected to surpass last year’s acquisition of biotech company Celgene by American pharmaceutical company Bristol-Myers Squibb (BMS) for $74 billion." British pharmaceutical company AstraZeneca currently has a market value of $140 billion, while Gilead’s market value is around $96 billion based on its stock price as of the 5th.

The news of this merger proposal has attracted more attention as pharmaceutical companies focus on developing treatments and vaccines amid COVID-19. AstraZeneca is developing a COVID-19 vaccine jointly with the University of Oxford and aims to supply the vaccine by September this year. Gilead is the developer of remdesivir, which received emergency approval from the U.S. Food and Drug Administration (FDA) as a COVID-19 treatment, and is also the developer of the novel influenza treatment Tamiflu. Over the past year, AstraZeneca’s stock price has risen by 41%, and Gilead’s by 19%.

John Lundt, Managing Partner at British pharmaceutical consulting firm Novasecta, said that the pandemic may have provided AstraZeneca with new opportunities in antiviral drugs, stating, "Perhaps AstraZeneca has come to believe that antiviral drugs will become a more important area than before, and acquiring a clear leader in this field is seen as laying the foundation for future growth."

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