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  • Jonathan Poyer

Gilead Acquires Cymabay Therapeutics for $4.3B. Pharma Keeps Looking for Differentiated Assets

Updated: Apr 11

The S&P Select Biotech Index continues to hold above the 50-day moving average as investors were treated to another M&A Monday and the passage of two HSR waiting periods without FTC inquiry (IMGN, RYZB).

Gilead (GILD) announced the acquisition of Cymabay Therapeutics (CBAY) for $4.3 billion or $32.50 per share representing a ~25% premium to prior close. The deal was generally well received and values the company at 4-8x peak sales of lead drug seladelpar for primary biliary cirrhosis (PBC) with bears estimating below $500 million and bulls $1 billion+ at peak. Analysts generally view the drug as a best in class second line agent, but debate the peak sales potential given competitor Intercept Pharmaceuticals (acquired by Alfasigma for $800 million or 2.3x current revenue) was only able to achieve a $350 million run rate after 8 years on the market.

The deal emphasizes pharma's seemingly insatiable appetite for differentiated assets. The modest 25% premium is a warning though, that stocks exhibiting significant momentum since the October lows may be ripe for a pullback. Specifically, CBAY shares rallied >110% from last October to the day prior to the deal announcement. Momentum has been a dominant market theme in 2024 with the MTUM ETF now trading at the highest premium over the 200 day moving average in a decade. It may be the next leg up that breaks biotech out of the bear market trading range we have been in for the past 3 years may be driven by names that have not yet been part of the momentum trade.


  • Gilead (GILD) to acquire Cymabay Therapeutics (CBAY) for $4.3 billion or $32.50 per share

  • Immunogen (IMGN) announces the expiration of HSR waiting period and closing of the previously announced transaction (ABBV)

  • Rayzebio (RYZB) announces the expiration of HSR waiting period (BMY)


  • An2 therapeutics (ANTX) fell >70% after pausing enrollment in a P3 trial for treatment-refractory MAC lung disease after a blinded analysis suggested lower than expected efficacy

  • Eli Lilly (LLY) reported SYNERGY-NASH Phase 2 study results of tirzepatide in adults with NASH hit the primary endpoint in up to 74% of participants at 52 weeks vs 13% of participants on placebo. Benefit on key secondary endpoint of fibrosis improvement was described as "clinically meaningful", but was not clearly defined. Competitors in the NASH space sold off on the news akin to the powerful GLP-1 narrative that pressured medtech stocks in 2023

  • Synlogic (SYBX) crashed >50% after discontinuing the Synpheny-3 study for lead drug SYNB1934 in PKU and announcing plans to conduct a strategic review. The company plans to cease operations and reduce the workforce by >90%

Capital Markets:

  • Kyverna therapeutics (KYTX) raised $319M in an upsized IPO with $14.5M shares sold at $22/share. Shares rose 36% in debut continuing the positive trend in 2024 biotech IPOs with clinical data that appears to be differentiating

  • Metagenomi (MGX) priced an IPO at the low end of the range raising ~$93 million, but traded down 31% in the debut

  • Telomir Pharmaceuticals (TELO) raised $7 million in an IPO and immediately broke issue price. Unlike in 2020 / 2021, enthusiasm for 2024 biotech IPOs has not yet extended to preclinical stories such as MGX and TELO

Corporate Updates & Earnings:

  • Astrazeneca (AZN) reported a 4Q core EPS miss, with in-line revenue. 2024 Total Revenue is expected to increase by a low double-digit to low teens percentage. Core EPS is expected to increase by a low double-digit to low teens percentage

  • Eli Lilly (LLY) reported a widely expected Q423 beat primarily driven by a 27% increase in realized US prices while ex-US realized prices were 3% lower. 2024 revenue guidance of $40.4-$41.6 billion (~6% above street) and adjusted EPS $12.20-$12.70 (street $12.56) imply a 58x multiple

  • Eisai (4523 JP) reported Q4 Alzheimer's treatment Leqembi sales of $7 million, below consensus of $14 million. 2,000 US patients have been treated, suggesting that reaching the goal of treating 10,000 patients by the end of March appears unlikely

  • Decipheria Pharmaceuticals (DCPH) reported a Q4 revenue beat $48.3m vs FS $45.9m street. Company expects to submit NDA for Vimseltinib in 2Q24 in Tenosynovial Giant Cell Tumor

  • Gilead (GILD) Q4 EPS miss of $1.72 vs street at $1.76 and 2024 guidance midpoint below consensus on revs and EPS

  • Amgen (AMGN) reported Q4 EPS of $4.71 vs the street at $4.59. 2024 guidance was in-line

  • Neurocrine Biosciences (NBIX) 2024 Ingrezza product sales guidance ahead ($2.1B-$2.2B vs $2.11B street), following in line 4Q

  • Embecta (EMBC) reported Q1 EPS, Revenue, and adj. EBITDA beat ($0.61 ex-items vs street $0.46, $277m vs street $264m, $90m vs street $78m) FY24 guides EPS higher to $1.95-2.15 vs prior guidance $1.90-2.10 (street $2.00) and Revenue $1.094B-1.116B vs prior guidance $1.085B-1.105B (street $1.10B)

Culling the Herd:

  • Rallybio Corporation (RLYB, 45% RIF)

  • Science 37 Holdings (SNCE, 23% RIF)

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