Gilead Sciences is to acquire privately-owned drug discovery company CGI Pharmaceuticals in a deal worth up to $120 million.

The majority of that cash will come in an upfront payment and the rest will depend on “clinical development progress”. In return, Gilead is getting a library of small molecule kinase inhibitors and the lead preclinical compound targets spleen tyrosine kinase; the companies say it could have “unique applications for the treatment of serious inflammatory diseases, including rheumatoid arthritis”.

Norbert Bischofberger, Gilead's chief scientific officer, said the acquisition represents “a unique opportunity to expand our research efforts in an interesting and promising area of drug discovery," He added that CGI has established itself in the area of protein kinase biology and small molecule discovery “and the company's scientific leadership and expertise represents a strong strategic fit with Gilead's existing research organisation”.

Founded out of Yale University in 2000 and based in Connecticut, CGI’s backers include firms such as MPM Capital, Flagship Ventures, Lilly BioVentures and Oxford Bioscience Partners. Analysts seem impressed by the deal, saying that although the research is still in its early stages, Gilead is wise to look at ways to reduce its reliance on HIV drugs, such as Viread (tenofovir disoproxil).