Gilead Sciences, Inc. has announced that the company has signed a definitive agreement under which Gilead plans to acquire Canadian subsidiary Raylo Chemicals Inc. and most of its assets from Degussa AG.
Under the terms of the agreement, which are subject to certain closing conditions, Gilead will pay approximately 115.2 million euros to Degussa.
In addition, Gilead has entered into long-term agreements with Degussa for the supply of raw materials and the manufacture of certain active pharmaceutical ingredients (API) for Gilead products.
The companies expect the transaction to close in the fourth quarter of 2006.
Gilead will assist Degussa in transitioning non-Gilead business to other sites. The Raylo name will remain an asset of Degussa.
"Gilead has had a long-standing and successful partnership with Degussa and Raylo, and we look forward to welcoming our colleagues at Raylo to the Gilead team," said John C. Martin, PhD, President and CEO, Gilead Sciences.
"As our company continues to grow, so does our need for chemical and manufacturing expertise."
"This agreement underscores our commitment to advancing new therapies that address significant unmet medical needs by enabling us to rapidly provide adequate supply of Gilead's investigational products for preclinical and clinical evaluation."
Dr. Klaus Engel, Chairman of Degussa's Management Board, said, "The sale of Raylo is a key step in our sustainable growth strategy in fine chemicals to shift production capacity from the Western Hemisphere to Asia."
"The long-term supply agreements with an innovative company such as Gilead prove Degussa's strong position in exclusive synthesis and are a landmark for the successful cooperation with a leading pharmaceutical company."
"For the Raylo employees this transaction opens new and attractive opportunities within Gilead."