In March, Gilead Sciences (Foster City, CA) announced the takeover of NeXstar Pharmaceuticals (Boulder, CO) in a deal worth about $550 million. Gilead will exchange 0.425 share of Gilead stock for each of NeXstar's, giving NeXstar shareholders a $208 million cash premium, as well as access to an experienced management team. "NeXstar has been without a CEO [since August], and this puts them in very capable hands with the Gilead management," says John Sonnier, analyst at Vector Securities (Deerfield, IL).

For Gilead, the acquisition expands its research focus from antivirals into other infectious diseases and oncology. Gilead gains NeXstar's antifungal, Ambisome, and the cancer therapy DaunoXome (both on the market) and three candidates in development, including the antibacterial, MiKasome. "NeXstar has annual sales of over 100 million dollars in product revenues and Ambisome is gaining market share very rapidly in the US," says Edward Hemmelgarn, analyst and president of Shaker Investments (Shaker Heights, OH). Moreover, Gilead is acquiring a competency in the form of NeXstar's European sales and marketing infrastructure—about 140 people in the EU. Gilead also gains NeXstar's combinatorial chemistry capability. NeXstar had historically spent about $20 million a year on the program and had planned to spin off that part of the company (Nat. Biotechnol. 16, 898 , 1998). Although Sonnier thinks Gilead will keep the program, "I don't think they'll spend 20 million dollars a year on it."