On Tuesday, Leerink Partners adjusted their outlook on shares of CymaBay Therapeutic (NASDAQ: CBAY), downgrading the stock to Market Perform from Outperform, while also raising the price target to $32.50 from $26.00. This move comes in the wake of the recent announcement that Gilead Sciences (NASDAQ:GILD) has agreed to acquire CymaBay for approximately $4.3 billion, or $32.50 per share in cash. The acquisition is seen as a strategic fit for Gilead, allowing the company to integrate CymaBay's seladelpar into its portfolio and capitalize on its expertise in liver disease.
The new price target set by Leerink reflects the terms of the proposed acquisition deal. Leerink views the deal as beneficial for Gilead, providing a valuable therapeutic asset for expanding its liver disease portfolio into rare cholestatic liver diseases. The acquisition is also seen as a testament to Gilead's confidence in the approval prospects of seladelpar, especially considering its upcoming PDUFA date on August 14.
Leerink highlighted seladelpar's potential for treating not only primary biliary cholangitis (PBC) but also its expansion possibilities into patient populations with milder second-line (2L) PBC and more severe compensated cirrhotic PBC. The firm believes that the acquisition by Gilead, ahead of the PDUFA date, indicates strong backing for the therapeutic's data and its approval chances.
Regarding regulatory considerations, Leerink anticipates low risk from the Federal Trade Commission due to minimal direct overlap in the commercial and pipeline products of the two companies. Furthermore, the firm considers the emergence of a competing bidder for CymaBay unlikely and expects the acquisition to be finalized according to the projected timeline, within the first quarter of 2024.
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