The price paid by Gilead Sciences (GILD) "more than adequately" reflects potential value from Kite Pharma's (KITE) AxiCel and adoptive cellular therapy pipeline, Wells Fargo analyst Jim Birchenough tells investors in a research note.

The analyst sees "little chance" of a higher offer or a price bump by Gilead. He raised his price target for Kite shares to $180 and keeps a Market Perform rating on the name.

The stock in afternoon trading is just below Gilead's $180 per share takeover offer at $178.12. The shares are up 28% on the day, or $39.02.

Earlier today:

CAR-T stocks rise after Gilead announces $12B Kite Pharma purchase

Gilead Sciences (GILD) has announced that it is acquiring Kite Pharma (KITE) for nearly $12B. Commenting on the announcement, both Credit Suisse and Leerink said Gilead is unlikely to invest in other CAR-T players given the size of the deal, and should "only do small bolt on deals." Meanwhile, stocks of several players in the sector have jumped following the news.

KITE PHARMA ACQUISITION: Gilead and Kite Pharma have announced that the companies have entered into a definitive agreement pursuant to which the former will acquire the latter for $180 per share in cash. The transaction, which values Kite at approximately $11.9B, was unanimously approved by both the Gilead and Kite Boards of Directors and is anticipated to close in the fourth quarter of 2017. The transaction will provide opportunities for diversification of revenues, and is expected to be neutral to earnings by year three and accretive thereafter.

NEW CHAPTER: Commenting on the acquisition, Credit Suisse analyst Alethia Young told investors that a new chapter begins in Gilead's pipeline potential with Kite Pharma's acquisition. While the analyst was surprised with the deal, she is "certainly encouraged" that Gilead acquired Kite Pharma, which is a CAR-T platform technology company in oncology. The analyst argued that this lifts the biggest overhang on the story, namely "what will Gilead do?" Young now views the Kite platform as the centerpiece by which Gilead will build in immuno-oncology and, therefore, would only expect Gilead to do small bolt on deals from here in oncology perhaps to expand combination potential with CAR-T. She reiterated an Outperform rating and $79 price target on Gilead's shares.

Leerink analyst Geoffrey Porges also voiced a similar opinion, noting that the $11.9B price paid by Gilead is "bracing," which suggests to him that Gilead is expecting revenue of $2B-3B from Kite's CAR-T platform in the future and that Gilead will not be investing in other CAR-T platforms, such as bluebird (BLUE), Juno Therapeutics (JUNO) and Cellectis (CLLS). However, the deal does not preclude Gilead from making further investments in other cancer treatment platforms, he added. Porges reiterated a Market Perform rating on Gilead's shares.

Meanwhile, JPMorgan analyst Cory Kasimov told investors that he views the acquisition of Kite as a potentially promising start for Gilead, but believes the deal does not cure all for the company's issues. Kite is unlikely to impact Gilead's growth outlook anytime soon, Kasimov contended, adding that he thinks additional deals are still important for Gilead.

WHAT'S NOTABLE: BTIG upgraded Juno Therapeutics to Neutral from Sell. Analyst Dane Leone said Gilead's acquisition of Kite will raise valuations across the CAR-T space due to a scarcity effect of remaining players.

PRICE ACTION: In afternoon trading, shares of Gilead have gained over 2% to $75.39, while Kite's stock has jumped more than 28% to $178.30. Also higher are Juno Therapeutics, bluebird and Cellectis, which have risen 17%, 9% and 15%, respectively.