Gilead Sciences, Inc. (Nasdaq: GILD) and Arcus Biosciences, Inc.
(NYSE: RCUS) today announced the closing of Gilead’s option
exercises to three programs in Arcus’s clinical-stage portfolio and
a new research collaboration between the two companies. On November
17, 2021, Gilead exercised its options to anti-TIGIT molecules
domvanalimab and AB308, as well as clinical candidates etrumadenant
(dual adenosine A2a/A2b receptor antagonist) and quemliclustat
(small molecule CD73 inhibitor).
The closing occurred following the expiration of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act.
Under the terms of the parties’ Option, License and
Collaboration Agreement, as amended in connection with Gilead’s
three option exercises (the “2020 Agreement”), the closing of this
transaction triggers option payments totaling $725 million from
Gilead to Arcus, expected to be paid in early Q1 2022. With closing
of the transaction for all three programs, the $100 million option
continuation payment previously due in Q3 2022 will not be made by
Gilead. In addition, the parties will co-develop and share the
global costs related to these clinical programs. If the optioned
molecules achieve regulatory approval, Gilead and Arcus will
co-commercialize and equally share profits in the U.S. Outside of
the U.S., Gilead holds exclusive commercialization rights, subject
to any rights of Arcus’s existing collaboration partners, and
Gilead would pay Arcus tiered royalties on net sales of each
optioned product.
About the Collaboration
In May 2020, Gilead and Arcus entered into a 10-year
collaboration that provided Gilead immediate rights to zimberelimab
and the right to opt into all other Arcus programs arising during
the collaboration term. In November 2021, Gilead and Arcus amended
the collaboration in connection with Gilead’s option exercise for
three of Arcus’s clinical stage programs. For all other programs
that are in clinical development or new programs that enter
clinical development thereafter, the opt-in payments are $150
million per program. Gilead’s option, on a program-by-program
basis, expires after a specified period of time following the
achievement of a development milestone for such program and Arcus’s
delivery to Gilead of the requisite qualifying data package.
Concurrent with the May 2020 collaboration agreement, Gilead and
Arcus entered into a stock purchase agreement under which Gilead
made a $200 million equity investment in Arcus. That stock purchase
agreement was amended and restated in February 2021 in connection
with Gilead’s increased equity stake in Arcus from 13% to 19.7%,
with an additional $220 million investment.
Upon closing of Gilead’s exercise of its option to a program,
the two companies will co-develop and share global development
costs for the joint development program, subject to certain opt-out
rights of Arcus in some cases and expense caps on its spending and
related subsequent adjustments. For each optioned program, provided
that Arcus has not exercised its opt-out rights, if any, Arcus has
an option to co-promote in the U.S. with equal profit share. Gilead
has the right to exclusively commercialize any optioned programs
outside of the U.S., subject to the rights of Arcus’s existing
collaboration partners to any territories, and, for clinical stage
programs that Gilead has opted into, Gilead will pay Arcus tiered
royalties as a percentage of net sales ranging from the mid or high
teens to the low twenties.
Zimberelimab, domvanalimab, AB308, etrumadenant and
quemliclustat are investigational agents and have not been proven
safe and efficacious.
About Arcus Biosciences
Arcus Biosciences is a clinical-stage, global biopharmaceutical
company developing differentiated molecules and combination
medicines for people with cancer. In partnership with industry
partners, patients and physicians around the world, Arcus is
expediting the development of first- or best-in-class medicines
against well characterized biology and pathways and studying novel,
biology-driven combinations that have the potential to help people
with cancer live longer. Founded in 2015, the company has expedited
the development of six investigational medicines into clinical
studies, including new combination approaches that target TIGIT,
PD-1, the adenosine axis (CD73 and dual A2a/A2b receptor) and most
recently, HIF-2alfa. For more information about Arcus Biosciences’
clinical and pre-clinical programs, please visit www.arcusbio.com
or follow us on Twitter.
About Gilead Sciences
Gilead Sciences, Inc. is a biopharmaceutical company that has
pursued and achieved breakthroughs in medicine for more than three
decades, with the goal of creating a healthier world for all
people. The company is committed to advancing innovative medicines
to prevent and treat life-threatening diseases, including HIV,
viral hepatitis and cancer. Gilead operates in more than 35
countries worldwide, with headquarters in Foster City,
California.
Arcus Biosciences Forward-Looking
Statements
This press release contains forward-looking statements. All
statements regarding events or results to occur in the future
contained herein, including, but not limited to, the expected
timing of Gilead’s option exercise payment to Arcus and the
parties’ expected co-development activities, are forward-looking
statements reflecting the current beliefs and expectations of
management made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. All
forward-looking statements involve known and unknown risks and
uncertainties and other important factors that may cause our actual
results, performance or achievements to differ significantly from
those expressed or implied by the forward-looking statements.
Factors that could cause or contribute to such differences include,
but are not limited to: Arcus’s dependence on the collaboration
with Gilead for the successful development and commercialization of
the optioned molecules; difficulties associated with the management
of the collaboration activities or expanded clinical programs; the
unexpected emergence of adverse events or other undesirable side
effects; the ability of the companies to initiate and execute the
joint development program for each of the optioned molecules,
including in a timely manner due to the inherent uncertainty
associated with the COVID-19 pandemic; the inherent uncertainty
associated with pharmaceutical product development and clinical
trials; risks associated with preliminary and interim data; and
changes in the competitive landscape for Arcus’s programs. Risks
and uncertainties facing Arcus are described more fully in its
quarterly report on Form 10-Q for the quarter ended September 30,
2021, filed on November 8, 2021, with the SEC. You are cautioned
not to place undue reliance on the forward-looking statements,
which speak only as of the date of this press release. Arcus
disclaims any obligation or undertaking to update, supplement or
revise any forward-looking statements contained in this press
release.
Gilead Forward-Looking
Statements
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are subject to risks, uncertainties and other factors,
including Gilead’s ability to realize the anticipated benefits from
the collaboration; difficulties or unanticipated expenses in
connection with the collaboration and the potential effects on
Gilead’s earnings; the ability of the companies to initiate,
progress or complete clinical trials within currently anticipated
timelines or at all, including those involving domvanalimab, AB308,
etrumadenant and quemliclustat; the possibility of unfavorable
results from ongoing or additional trials, including those
involving domvanalimab, AB308, etrumadenant and quemliclustat;
uncertainties relating to regulatory applications and related
filing and approval timelines, including the risk that regulatory
authorities may not approve such applications in the anticipated
timelines or at all; the possibility that the parties may make a
strategic decision to discontinue development of any of the
investigational agents under the collaboration and therefore these
investigational agents may never be successfully commercialized;
the possibility that the parties may make a strategic decision to
terminate the collaboration; and any assumptions underlying any of
the foregoing. These and other risks, uncertainties and other
factors are described in detail in Gilead’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2021, as filed with
the U.S. Securities and Exchange Commission. These risks,
uncertainties and other factors could cause actual results to
differ materially from those referred to in the forward-looking
statements. All statements other than statements of historical fact
are statements that could be deemed forward-looking statements.
Investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and
uncertainties and are cautioned not to place undue reliance on
these forward-looking statements. All forward-looking statements
are based on information currently available to Gilead, and Gilead
assumes no obligation and disclaims any intent to update any such
forward-looking statements.
The Arcus name and logo are trademarks of
Arcus.
Gilead and the Gilead logo are trademarks of
Gilead Sciences, Inc., or its related companies.
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version on businesswire.com: https://www.businesswire.com/news/home/20211221005751/en/
Gilead Contacts: Jacquie Ross, Investors (650) 358-1054
Nathan Kaiser, Media (650) 522-1853 Arcus Contact: Holli
Kolkey VP of Corporate Communications (650) 922-1269
hkolkey@arcusbio.com
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