Gilead is paying $35 million cash to expand an existing oncology partnership with Arcus Biosciences into inflammatory diseases, giving the biotech the chance to make up to $1 billion in biobucks.
Cancer-centric Arcus will get $35 million upfront and launch research programs for up to four inflammatory disease targets chosen with Gilead under the expanded deal. The Big Pharma then has the option to license each program at two separate, prespecified points in time.
If Gilead takes up the earlier option for the first two programs, Arcus could make up to $420 million in option and milestone payments and royalties for each program. If the pharma doesn’t take the earlier choice, the companies would co-develop and share global development costs for any other licensing option, as well as co-commercialize and share potential U.S. profits.
In clearer terms, the deal offers Arcus the potential to make up to $1 billion in option fees and milestone payments for four inflammation programs, an Arcus spokesperson told Fierce Biotech.
The collaboration boosts Gilead’s growing efforts in the inflammation space and could expand Arcus’ portfolio beyond oncology. To date, Gilead has invested about $1.4 billion into small molecule-focused Arcus, according to the biotech’s spokesperson.
In 2020, the companies inked a 10-year partnership aimed at developing next-gen cancer immunotherapies. The two are now assessing anti-TIGIT antibody domvanalimab in both lung and gastrointestinal cancer across several clinical trials. Gilead expects more data in the first half of the year from an ongoing phase 2 trial testing domvanalimab and Arcus’ anti-PD1 zimberelimab together for patients with non-small cell lung cancer.
The new agreement is expected to drop Gilead’s 2023 earnings per share by 2 cents due to in-process research and development costs. The California-based pharma’s stock currently sits at $78.07 per share as of market open today.
Gilead isn’t the only company wheeling and dealing. China-based Xiamen Amoytop Biotech has penned a new pact with California-based Aligos Therapeutics to develop new oligonucleotide compounds for liver diseases. Amoytop will use Aligos’ oligonucleotide platform and has the option to exclusively license resulting products in the Greater China territory while Aligos will keep rest-of-world rights. In exchange, Amoytop has paid Aligos an undisclosed amount of cash upfront, will help fund collaborative research and is giving the American biotech the chance to make up to $109 million in milestone payments, as well as tiered royalties.
It’s a strike of good luck for Aligos. The biotech has had its share of struggles lately, including a Janssen Biopharma lawsuit that alleges intellectual theft and a round layoffs that claimed 10% of employees in February in an attempt to stretch its cash runway to the end of 2024.