Gilead Sciences, Inc. (Nasdaq:GILD) today 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 Germany-based, specialty chemicals company 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.
Located in Edmonton, Canada, Raylo Chemicals is currently part of
Degussa's Exclusive Synthesis & Catalysts business unit. Raylo's
operations encompass custom manufacturing of API and advanced
intermediates for the pharmaceutical and biopharmaceutical industries.
Gilead has worked with Raylo over the course of the last 14 years,
during which time Raylo has provided both development expertise and
commercial product on a large scale for Gilead. Gilead intends to
utilize this site primarily for manufacturing development of
investigational products, supplying API for clinical research programs
and contributing to new product launch supplies. 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: "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."
About Gilead Sciences
Gilead Sciences is a biopharmaceutical company that discovers,
develops and commercializes innovative therapeutics in areas of unmet
medical need. The company's mission is to advance the care of patients
suffering from life-threatening diseases worldwide. Headquartered in
Foster City, California, Gilead has operations in North America,
Europe and Australia. For more information, please visit
www.gilead.com.
About Degussa
Degussa is the global market leader in specialty chemicals. Its
business is creating essentials -- innovative products and system
solutions that make indispensable contributions to its customers'
success. In fiscal 2005 around 44,000 employees worldwide generated
sales of 11.8 billion euros and operating profits (EBIT) of 940
million euros. For more information, please visit www.degussa.com.
Forward-Looking Statement
This press release includes forward-looking statements, within the
meaning of the Private Securities Litigation Reform Act of 1995, that
are subject to risks, uncertainties and other factors, including risks
and uncertainties related to the companies' ability to satisfy the
closing conditions and consummate the purchase. These risks,
uncertainties and other factors could cause actual results to differ
materially from those referred to in the forward-looking statements.
The reader is cautioned not to rely on these forward-looking
statements. For these and other risks Gilead directs its readers to
its Annual Report on Form 10-K for the year ended December 31, 2005
and the report on Form 10Q for the first quarter 2006 as filed with
the U.S. Securities and Exchange Commission. All forward-looking
statements are based on information currently available to Gilead and
Gilead assumes no obligation to update any such forward-looking
statements.
