June 25, 2010 / 1:03 PM / 7 years ago

UPDATE 1-Gilead to acquire CGI for up to $120 mln

* CGI focused on small molecule chemistry and biology

* Funding will come from cash on hand

* Expects deal to close in the third quarter

BOSTON, June 25 (Reuters) - Gilead Sciences Inc (GILD.O) said on Friday it agreed to acquire privately held drug discovery company CGI Pharmaceuticals Inc for up to $120 million.

CGI has generated a library of small molecule kinase inhibitors. Its lead compound could have unique applications for the treatment of inflammatory diseases, including rheumatoid arthritis, Gilead said.

Funding for the deal will come from cash on hand. Most will consist of an upfront payment, and the remainder will be based on clinical development progress.

Foster City-based Gilead is a leading maker of treatments for HIV/AIDS. The company expects the deal to close in the third quarter. (Reporting by Toni Clarke; Editing by Derek Caney)

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