US biopharmaceutical firm Gilead Sciences, Inc. said on Monday it has agreed to buy the Israeli-founded Kite Pharma for about $12 billion in an all-cash deal.

Headquartered in Santa Monica, California, Kite is a biopharmaceutical company that develops cell therapies in which the patient’s own immune cells fight cancer. It was founded in 2009 by Israeli-American oncologist Arie Belldegrun, who is today its chairman, president and CEO. Belldegrun studied at the Hebrew University and Weizmann Institute of Science.

In a statement, Gilead said that the companies have entered a definitive agreement through which Gilead will buy Kite for $180 per share in cash, a 29 percent premium on Kite’s closing price this past Friday. Both companies are traded on the Nasdaq. The deal was unanimously approved by both the Gilead and Kite Boards of Directors, and is anticipated to close in the fourth quarter of 2017, the statement said.

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Kite has some 500 employees and is anticipating the US manufacture of its first drug, axi-cel, for refractory aggressive non-Hodgkin lymphoma, after it gets FDA approval, expected in the fourth quarter of this year. The manufacturing preparations are complete for US production, while the firm is building its manufacturing infrastructure in Europe, ahead of the expected product launch on that continent in 2018.

“The acquisition of Kite establishes Gilead as a leader in cellular therapy and provides a foundation from which to drive continued innovation for people with advanced cancers,” said John F. Milligan, PhD, Gilead’s president and chief executive officer.

“The field of cell therapy has advanced very quickly, to the point where the science and technology have opened a clear path toward a potential cure for patients. We are greatly impressed with the Kite team and what they have accomplished, and share their belief that cell therapy will be the cornerstone of treating cancer. Our similar cultures and histories of driving rapid innovation in order to bring more effective and safer products to as many patients as possible make this an excellent strategic fit,” he said.

Research and development, as well as the commercialization operations for Kite, will remain based in Santa Monica, California, with product manufacturing remaining in El Segundo, California, the statement said.

“From the release of our pivotal data for axi-cel, to our potential approval by the FDA, this is a year of milestones. Each and every accomplishment is a reflection of the talent that is unique to Kite. We are excited that Gilead, one of the most innovative companies in the industry, recognized this value and shares our passion for developing cutting-edge and potentially curative therapies for patients,” said Belldegrun in the statement.

Prof. Zelig Eshhar from the Weizmann Institute of Science, who developed the technology which is at the heart of Monday’s acquisition, told the Israel Project in an interview that the technology engineers the cells of the patient’s immune system and when re-injected into the patient it enables the cells to recognize the cancer and reject it.

“It is a simple and efficient development,” said Eshhar, who is on Kite’s scientific advisory board.

Steven Tepper, a pharma analyst at IBI — told Calcalist TV that the deal validates the technology developed by Kite. All big pharma firms are trying to get a hold of cancer treatments, which is a hot field.

He added that Kite’s CAR-T development, used its axi-cel therapy, uses genetic engineering to make the cells of the patient’s immune system into “killer cells” to fight the cancer cells. The Car-T technology is “very advanced, it is the science fiction of the war against cancer. There are a number of companies working on this front and Kite Pharma is one of the companies leading in this field,” Tepper said.

CAR-T, or chimeric antigen receptor T-cell therapy, is an emerging field, which uses the body’s own immune cells to recognize and attack malignant cells.

The deal follows on the heels of the acquisition in July of drugmaker NeuroDerm to Japanese Pharma firm Mitsubishi Tanabe for $1.1 billion, said to be the largest ever purchase of an Israeli healthcare company.

Under the terms of the merger agreement, a wholly-owned subsidiary of Gilead will hold a tender offer to acquire all of the outstanding shares of Kite’s common stock at a price of $180 per share in cash. Following successful completion of the tender offer, Gilead will acquire all remaining shares not tendered in the offer through a second step merger at the same price as in the tender offer, the statement said.

Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics in areas of unmet medical need. Gilead has operations in more than 30 countries worldwide, with headquarters in Foster City, California.