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Gilead (GILD) To Get Full Rights for Jounce's Immunotherapy

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Gilead Sciences, Inc. (GILD - Free Report) announced that it will acquire the remaining rights to GS-1811 (formerly JTX-1811) from Jounce Therapeutics .

GS-1811, a potentially first-in-class immunotherapy, is designed to selectively deplete immunosuppressive tumor-infiltrating T regulatory cells in the tumor microenvironment and is currently in phase I development as a possible treatment for patients with solid tumors.

Both companies amended their existing license agreement for GS-1811, which will enable Gilead to buy out any remaining contingent payments potentially due under the license agreement executed in August 2020. As part of the transaction, certain operational obligations of the parties related to GS-1811 set forth in the license agreement have also been terminated.

Gilead will be solely responsible for all further research, development and commercialization of GS-1811 globally. In exchange, Jounce will receive proceeds of $67 million for this transaction but will no longer be entitled to receive the remaining contingent payments of up to $645 million in milestones and high single-digit to mid-teens royalties based upon worldwide sales under the original license agreement.

The transaction will further strengthen Gilead’s pipeline. Gilead is making efforts to develop its oncology business to diversify its revenue base as competition in the HIV business is stiff.

Gilead is having a good run as its shares have gained 17.1% in the year so far against the industry’s decline of 22%.

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The uptake of the breast cancer drug Trodelvy has been strong and has boosted the top line.

 

The oncology space is lucrative and Gilead can capitalize on it, thereby creating a revenue growth driver in addition to the HIV franchise.

The company is also sitting on a huge cash balance. As of Sep 30, 2022, Gilead had $6.9 billion in cash, cash equivalents and marketable debt securities. Potential acquisitions to further expand its portfolio/pipeline will bode well for the stock.

The company earlier announced a global strategic collaboration with a clinical-stage biotechnology company, Arcellx, Inc. (ACLX - Free Report) , to co-develop and co-commercialize the latter’s lead late-stage product candidate, CART-ddBCMA. Per the terms, Arcellx will receive an upfront cash payment of $225 million and a $100 million equity investment, as well as other potential contingent payments. Gilead’s wholly owned subsidiaries, Kite and Arcellx, will share development, clinical trial and commercialization costs for CART-ddBCMA and will jointly commercialize the product. The profits of the deal will be split equally. The transaction is expected to close in the first quarter of 2023.

Gilead also announced a clinical collaboration with ImmunoGen . Both companies have collaborated to evaluate the safety and anti-leukemia activity of pivekimab sunirine (pivekimab) in combination with magrolimab, a potential, first-in-class, investigational CD47 inhibitor, in patients with relapsed or refractory (R/R) CD123-positive acute myeloid leukemia (AML).

Gilead currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


 


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