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Gilead to acquire Calistoga

Gilead Sciences has entered into an agreement to acquire the biotech company Calistoga Pharmaceuticals in a deal worth up to $600m

Gilead Sciences has entered into an agreement to acquire the privately held biotech company Calistoga Pharmaceuticals in a deal that could be worth up to $600m

The deal, which is expected to close during the second quarter, calls for Gilead to pay $375m in cash upfront, with the potential for Calistoga to earn another $225m if certain milestones are achieved.

Seattle, Washington-based Calistoga is focused on developing treatments for cancer and inflammatory diseases. The company's lead product is CAL-101, an inhibitor of phosphoinositide-3 kinase that is currently in phase II studies as a single agent in patients with refractory indolent non-Hodgkin's lymphoma and in combination with rituximab in treatment-naïve elderly patients with chronic lymphocytic leukaemia.

The phosphoinositide-3 kinase pathway has been shown to be a central signalling pathway for cellular proliferation, survival and trafficking, according the company, which also has a number of selective PI3K inhibitors in preclinical development for other indications in oncology and inflammatory diseases.

Gilead has a portfolio of 13 marketed products, mainly in the areas of HIV/AIDS, liver disease and serious cardiovascular/metabolic and respiratory conditions. The Calistoga acquisition comes on the heels of the company's acquisitions last year of two other small biotech companies, CGI Pharmaceuticals and Arresto Biosciences, both of which are also developing drugs in the areas of oncology and inflammation.

Gilead acquired Arresto for $225m plus potential future payments based on achievement of certain sales levels. The company's lead product is a humanised monoclonal antibody being tested in early clinical studies as a treatment for idiopathic pulmonary fibrosis and advanced solid tumours.

Gilead paid $120m plus potential milestones for CGI in a bid to broaden its expertise in kinase biology and chemistry. CGI has generated a library of proprietary small molecule kinase inhibitors, with a lead preclinical compound that the company hopes could be effective for treating inflammatory diseases such as rheumatoid arthritis.

22nd February 2011

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