It has been reported AstraZeneca (LON:AZN) approached US-based Gilead about a possible merger that would create one of the globe’s largest pharmaceutical companies.
If the merger were to go ahead, the new company would be the world’s foremost organisation in the fight against COVID-19 given the development of vaccines and treatments at the respective companies.
Despite an initial buzz around the merger, it was later reported by the Times that AstraZeneca dropped their interest in the deal.
It is common for companies to decline media comment during merger talks and sources provide information under on the understanding anonymity, making it hard to verify progress of any talks.
A spokesman for AstraZeneca said they do not comment on “rumors or speculation’ whilst Gilead declined to comment.
COVID-19 treatment
AstraZeneca has recently announced they are working on the provision of 2 billion vaccine doses should it receive approval from ongoing trials.
Whilst AstraZeneca is working on a potential vaccine, Gilead is the only treatment that is approved in the US to treat COVID-19.
Gilead’s anti-viral drug, Remdesivir, received emergency approval from the FDA after a number of trials found positive effects in patients with severe COVID-19. Despite the positive results, other studies found little or no positive effects and there is some scepticism around the long term impact of the drug.
Notwithstanding the development of COVID-19 treatments and vaccines, the new organisation would have a significant pipeline of potential drugs for cancer and other life-threatening diseases. AstraZeneca has recently released updates on cancer drug Tagrisso which has the potential to be a blockbuster for the UK-based company.
These pipelines may also be a stumbling block for a merger because Gilead’s pipeline could provide investors with significant value without the interference of AstraZeneca.
In addition, the sheer size of the two companies would make it a difficultly slow process to push through and have approved during lockdown and social distancing.
Shares in AstraZeneca (LON:AZN) were 2.5% softer at 972p at lunchtime in London trade.
