Gilead Plans to Buy Nexstar for $550 Million

Gilead Sciences Inc. said it will buy Nexstar Pharmaceuticals Inc. for $550 million in stock, giving Gilead two new drugs and sales teams in Europe and Australia. Foster City, Calif.-based Gilead, one of the few biotechnology companies with a drug on the market, would pay about $17.48 in its stock for each Nexstar share, based on recent Gilead trading. That’s a 27% premium to Nexstar’s Friday price of $13.81. Gilead said it will have annual revenue of more than $100 million after the purchase. Boulder, Colo.-based Nexstar already has 135 sales representatives in Europe and Australia, markets where Gilead had planned to start building its own sales force. Analysts predict Nexstar will report its first annual profit for 1998, making it one of the few biotech companies that earn money. In Nasdaq trading, Gilead fell 50 cents to close at $40.75, and Nexstar rose $1.31 to close at $15.13. Both companies already produce drugs for conditions related to AIDS.