Gilead Sciences said Wednesday that it entered into a 10-year partnership with Arcus Biosciences to co-develop and co-commercialise next-generation cancer immunotherapies from the latter's pipeline. Under the agreed terms, Gilead will make an upfront payment of $175 million to Arcus upon closing, as well as an equity investment of $200 million in the drugmaker.
Arcus' pipeline comprises investigational therapies that target mechanisms involved in tumour evasion of the immune system, as well as drug candidates that target cell-intrinsic pathways important for cancer growth and metastasis. Gilead noted that in addition to small-molecule products, Arcus is also advancing antibody products that target immune checkpoint receptors, including PD-1 and TIGIT.
The announcement comes shortly after sources suggested that Gilead had held talks about acquiring a significant stake in Arcus and also discussed the possibility of development partnerships. Gilead noted that Arcus has 10 ongoing clinical studies of molecules in its portfolio, including a randomised Phase II study testing the anti-TIGIT antibody AB154 in first-line non-small-cell lung cancer in combination with the A2aR/A2bR antagonist AB928 and the anti-PD1 antibody zimberelimab, formerly AB122, with preliminary results expected in the fourth quarter.
AB928 is also being evaluated in several Phase Ib/II trials across multiple indications, including prostate, colorectal, pancreatic, triple negative breast and renal cell cancers, while zimberelimab is being assessed in a Phase Ib study as monotherapy for cancers with no approved anti-PD-1 treatment options, as well as in combinations across the portfolio.
"We are very pleased to build on [our] growing presence in immuno-oncology," commented Gilead CEO Daniel O'Day, adding that "by gaining access to its broad, diverse pipeline and Arcus' clear strengths in discovery and development, we believe that our partnership…will significantly accelerate our progress in developing transformative new therapies for cancer."
In addition to the initial payment and equity investment from Gilead, Arcus is also eligible to receive up to $1.225 billion in opt-in and milestone payments with respect to its current clinical candidates. Specifically, Gilead will gain access to Arcus' current and future investigational immuno-oncology products, including immediate rights to zimberelimab, plus opt-in rights to all other current Arcus clinical candidates, such as AB154 and AB928, as well as the CD73 inhibitor AB680, which is in early-stage development for first-line metastatic pancreatic cancer, upon payment of a fee that ranges from $200 million to $275 million per programme. Moreover, if Gilead exercises its option to the AB154 programme, Arcus could receive up to $500 million in potential future US regulatory approval milestones.
Gilead will be able to opt-in to all other programmes that emerge from Arcus' research portfolio over the next 10 years, upon payment of a $150-million fee per programme. If Gilead opts-in to a programme, both companies will share global development costs and jointly market and share profits in the US. Gilead will also have exclusive rights to commercialise any optioned programmes outside the US, for which it will pay Arcus tiered royalties ranging from high-teens to low twenties. In addition, Gilead will provide up to $400 million in ongoing R&D support over the course of the collaboration.
Meanwhile, the $200-million equity investment will be at a price of $33.54 per share. Gilead will also be able to purchase more shares from Arcus, up to a maximum of 35% of its voting stock over the next five years, at a 20% premium at the time Gilead exercises such option, or, if greater, at the initial purchase price per share. The transaction is expected to close in the third quarter.
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