California therapeutics giant Gilead Sciences Inc. said Friday it is offering up to $120 million for a Branford development-stage drug company, a deal Connecticut officials say burnishes the state’s reputation as an emerging bioscience hub.
Most of the price for CGI Pharmaceuticals, in which Connecticut is a stakeholder, will be paid upfront, with the remainder based on clinical development progress, Gilead said. The deal will be financed through cash on hand and is expected to close in the third quarter, The Associated Press reports.
Based in Foster City, Calif., Gilead is one of the world’s fastest-growing bioscience companies, with 2009 sales totaling $7 billion and earnings of $2.6 billion. It started out developing primarily drugs for treating HIV, hepatitis B and influenza, but has since branched into therapies for heart and lung ailments.
Gilead said CGI’s lead preclinical compound could have applications for treating serious inflammatory diseases like rheumatoid arthritis. Connecticut Innovations Inc., the state’s technology investment arm, put money into CGI starting back in 2000 and to date has put $4.7 million into the company, said CI President Peter Longo.
The exact percentage of the state’s stake in CGI is still being determined, Longo said. With the deal, CI will effectively cash out of CGI and plow the proceeds into building its Connecticut technology portfolio, he said.
“This is good news for Connecticut,” Longo said. “Gilead is a premiere biotech company and we’ll have them here in Connecticut.”
After the deal, CGI, which focuses on small-molecule chemistry and kinase biology, will become a wholly owned subsidiary of Gilead. CGI was formerly Cellular Genomics Inc., which sprang from research at Yale University.
CGI did not immediately respond to a phone call seeking comment about its staffing levels and future plans.
