Shares of Gilead Sciences Inc fell nearly 2% on Monday as investors questioned the steep premium the U.S. drugmaker was willing to pay for Immunomedics Inc .
Gilead on Sunday agreed to buy all the outstanding shares of Immunomedics for $88 per share, at a premium of about 108% over Friday's closing price of $42.25.
The deal gives Gilead access to Immunomedics' cancer treatment drug, Trodelvy, which was granted an accelerated approval in April by the U.S. Food and Drug administration for an aggressive and tough-to-treat type of breast cancer.
At least two brokerages raised concerns about the deal price.
Baird said Trodelvy should give Gilead a "nice addition" to cement its foothold in the cancer treatment sphere, but that it was "less than thrilled" about the price.
SVB Leerink expects the main push back from investors to be about the deal price, not the product or the commercial opportunity.
"Gilead's purchase price is at a 300% premium to where Immunomedics traded at the start of the year, and more than 100% higher than where the stock had recently traded," the brokerage said.
Gilead's shares were down 1.5% at $63.94 before the opening bell on Monday.
(Reporting by Vishwadha Chander in Bengaluru; Editing by Shinjini Ganguli) ((Vishwadha.Chander@thomsonreuters.com; within U.S. +1 646 223 8780, outside U.S. +91 80 6749 6132;))
