Jun 8, 2020 - Economy

AstraZeneca approached Gilead Sciences about possible merger

Dan Primack

Illustration of a pill bottle, a red cross and a pile of money. — Illustration: Sarah Grillo/Axios

AstraZeneca approached Gilead Sciences last month about a possible merger, although the two companies aren't currently in formal talks, as first reported by Bloomberg.

Why it matters: This still feels highly unlikely but, if consummated, would be the largest health care merger in history. AstraZeneca has a current market cap of around $140 billion, while Gilead's is $96 billion. It also could portend a rash of pharma deal-talk ahead of treatments or vaccines for COVID-19.

The bottom line: "Most large biopharma deals arise from a position of distress, not strength, and Gilead today is far from distressed," per an SVB Leernik analyst note.

"It may suggest that AZN is looking to leverage its valuation and current strategic position by making a large acquisition to diversify away from dependence on its blockbuster oncology franchise."
"Other targets, such as perhaps Biogen, Amgen, or Alexion, may be equally suitable for these purposes, and could prove more amenable to overtures."

Go deeper: Wall Street forecasts blockbuster sales for Gilead's coronavirus drug remdesivir

Add Axios on Google

AstraZeneca approached Gilead Sciences about possible merger

What to read next