– Arcus to Receive $175 Million Upfront
Payment and $200 Million Equity Investment and up to $1.6 Billion
Plus in Potential R&D Funding, Opt-in and Milestone Payments
with Respect to its Current Clinical Product Candidates –
– Gilead Gains Broad Access to Arcus’s
Clinical and Preclinical Pipeline of Immuno-Oncology Product
Candidates that Target Critical Biological Pathways –
– Companies to Co-commercialize
Gilead-Optioned Programs in the U.S. with Equal Profit Share; Arcus
to Receive Double-Digit Royalties Outside the U.S. –
– Arcus to Continue to Independently Conduct
Research on New Targets; Gilead to Receive Rights to Opt-In to All
Programs in Arcus’s Pipeline for Length of Collaboration –
Gilead Sciences, Inc. (NASDAQ: GILD) and Arcus Biosciences, Inc.
(NYSE: RCUS), an oncology-focused biopharmaceutical company working
to create best-in-class cancer therapeutics, announced today that
the companies have entered into a 10-year partnership to co-develop
and co-commercialize current and future therapeutic product
candidates in Arcus’s pipeline. The agreement will also provide
ongoing funding to support Arcus’s research and development
programs.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20200527005478/en/
Arcus is building an extensive and diverse portfolio of
investigational products that target important mechanisms involved
in tumor evasion of the immune system, as well as developing drug
candidates that target cell-intrinsic pathways important for cancer
growth and metastasis. In addition to small molecule products,
Arcus is also advancing antibody products that target immune
checkpoint receptors, including PD-1 and TIGIT. Arcus currently has
a clinical-stage pipeline of four immuno-oncology programs, as well
as an active oncology discovery pipeline with six preclinical
compounds that target critical biological pathways. A core
component of Arcus’s strategy is the development of intra-portfolio
combinations that include small-molecule and antibody product
candidates. Arcus has 10 ongoing clinical studies of molecules in
its portfolio, including a randomized Phase 2 study in first-line
non-small cell lung cancer evaluating combinations of three Arcus
product candidates: AB154, an investigational anti-TIGIT monoclonal
antibody; AB928, an investigational A2aR/A2bR antagonist; and
zimberelimab (AB122), an investigational anti-PD-1 monoclonal
antibody.
“We are very pleased to build on Gilead’s growing presence in
immuno-oncology with this important new strategic collaboration
with Arcus,” said Daniel O’Day, Chairman and Chief Executive
Officer, Gilead Sciences. “Gilead is committed to accessing the
world’s best innovation in immuno-oncology and our agreement with
Arcus further demonstrates that commitment. By gaining access to
its broad, diverse pipeline and Arcus’s clear strengths in
discovery and development, we believe that our partnership with
Arcus will significantly accelerate our progress in developing
transformative new therapies for cancer.”
“We believe Gilead is an ideal partner for Arcus with its focus
on thoughtful and purposeful science, vision to provide
transformational therapies in the oncology setting and deeply
experienced scientific leadership,” said Terry Rosen, PhD, Chief
Executive Officer, Arcus. “This collaboration will allow us to act
as one team to maximize the clinical and commercial potential of
Arcus’s therapeutic development candidates, greatly amplifying and
expediting the opportunities in our pipeline and discovery
programs. At the same time, this partnership structure facilitates
Arcus’s path to becoming an independent, fully integrated
biopharmaceutical company.”
Terms of the Partnership
Under the terms of the agreement, Arcus will receive $375
million upon closing, consisting of a $175 million upfront payment
and a $200 million equity investment from Gilead. Arcus is eligible
to receive up to $1.225 billion in opt-in and milestone payments
with respect to its current clinical product candidates. Gilead
will gain access to Arcus’s current and future investigational
immuno-oncology products through the agreement, as Gilead continues
to expand its presence in the field. This includes immediate rights
to zimberelimab, as well as the right to opt-in to all other
current Arcus clinical candidates, which include AB154, AB928 and
AB680, upon payment of an opt-in fee that ranges from $200 million
to $275 million per program, after delivery of a qualifying data
package. If Gilead opts-in to the AB154 program, Arcus is eligible
to receive up to $500 million in potential future U.S. regulatory
approval milestones.
Gilead will receive the right to opt-in to all other programs
that emerge from Arcus’s research portfolio over the next 10 years,
upon payment of an opt-in fee of $150 million per program after
Arcus’s delivery of a qualifying data package.
Upon Gilead’s exercise of its option for a program, unless Arcus
opts out according to terms of the agreement, the companies will
co-develop and share global development costs and will
co-commercialize and share profits in the United States. Gilead
will obtain exclusive rights to commercialize any optioned programs
outside of the U.S., subject to any rights of Arcus’s existing
partners, and for which Gilead will pay to Arcus tiered royalties
ranging from high-teens to low twenties. Gilead will further
provide ongoing research and development support of up to $400
million over the collaboration term.
Gilead will have the right to appoint two individuals to Arcus’s
Board of Directors upon closing of the transaction.
Terms of the Equity
Investment
Gilead’s $200 million equity investment will be at a price per
share of $33.54. Additionally, Gilead will have the right to
purchase additional shares from Arcus, up to a maximum of 35% of
the outstanding voting stock of Arcus over the course of 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.
This transaction, which is expected to close in the third
quarter of 2020, is subject to applicable antitrust clearance under
the Hart-Scott Rodino Antitrust Improvements Act and other
customary closing conditions.
Cowen and Morgan Stanley & Co. LLC are acting as financial
advisors to Gilead. Citi is acting as financial advisor to Arcus.
Covington & Burling LLP, Skadden, Arps, Slate, Meagher &
Flom LLP and Venable LLP are serving as legal counsel to Gilead and
Cooley is serving as legal counsel to Arcus.
Zimberelimab, AB928, AB680 and AB154 are investigational and not
approved anywhere globally. Their efficacy and safety have not been
established. More information about clinical trials with
zimberelimab, AB928, AB680 and AB154 is available at
www.clinicaltrials.gov.
Arcus Conference Call
At 5:00 a.m. Pacific Time/8:00 a.m. Eastern Time today, Arcus's
management will host a conference call and a simultaneous webcast
to discuss the transaction. A live webcast of the call can be
accessed by visiting the “Investors” section of Arcus’s website at
www.arcusbio.com. Please connect to the website at least 15 minutes
prior to the start of the call to allow adequate time for any
software download that may be required. Alternatively, please call
(877) 209-6698 (U.S.) or (825) 312-2373 (International) and dial
the conference ID 1827008 to access the call. A replay of the
webcast will be available approximately two hours after the call
through 14 days following the live event.
About Arcus Biosciences
Arcus Biosciences is an oncology-focused biopharmaceutical
company leveraging its deep cross-disciplinary expertise to
discover highly differentiated therapies and to develop a broad
portfolio of novel combinations addressing significant unmet needs.
AB928, the first and only dual A2a/A2b adenosine receptor
antagonist in the clinic, is being evaluated in several Phase 1b/2
studies across multiple indications, including prostate,
colorectal, non-small cell lung, pancreatic, triple negative breast
and renal cell cancers. AB680, the first small-molecule CD73
inhibitor in the clinic, is in Phase 1 development for first-line
treatment of metastatic pancreatic cancer. AB154, an anti-TIGIT
monoclonal antibody, is in randomized Phase 2 development for
first-line treatment of metastatic non-small cell lung cancer in
combination with zimberelimab and AB928. Zimberelimab (AB122),
Arcus’s anti-PD-1 monoclonal antibody, is being evaluated in a
Phase 1b study as monotherapy for cancers with no approved
anti-PD-1 treatment options, as well as in combinations across the
portfolio. For more information about Arcus Biosciences, please
visit www.arcusbio.com.
About Gilead Sciences
Gilead Sciences, Inc. is a research-based biopharmaceutical
company that discovers, develops and commercializes innovative
medicines in areas of unmet medical need. The company strives to
transform and simplify care for people with life-threatening
illnesses around the world. Gilead has operations in more than 35
countries worldwide, with headquarters in Foster City, California.
For more information on Gilead Sciences, please visit the company’s
website at www.gilead.com.
Arcus Biosciences Forward-Looking
Statements
This press release contains forward-looking statements. All
statements other than statements of historical facts contained
herein, including, but not limited to, the ability of the parties
to complete this transaction in a timely manner or at all or
achieve the expected benefits of this transaction, 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,
uncertainties and other important factors that may cause Arcus’s
actual results, performance or achievements to differ significantly
from those expressed or implied. Factors that could cause or
contribute to such differences include, but are not limited to, the
ability to obtain regulatory approval for the transaction, inherent
uncertainty associated with the COVID-19 pandemic, including the
duration and/or severity of the outbreak and actions by government
authorities to slow the spread of the virus, and inherent
uncertainties associated with pharmaceutical product discovery,
development and commercialization. Risks and uncertainties facing
Arcus are described more fully in Arcus’s most recent annual report
on Form 10-K and quarterly report on Form 10-Q, each filed 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 the ability of the parties to complete this transaction
in a timely manner or at all, the ability of the parties to meet
potential milestones in the estimated timelines or at all and the
risk that the parties may not realize the expected benefits of this
collaboration. All statements other than statements of historical
fact are statements that could be deemed forward-looking
statements. These risks, uncertainties and other factors could
cause actual results to differ materially from those referred to in
the forward-looking statements. The reader is cautioned not to rely
on these forward-looking statements. These and other risks are
described in detail in Gilead’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2020, as filed with the U.S. Securities
and Exchange Commission. All forward-looking statements are based
on information currently available to Gilead, and Gilead assumes no
obligation to update any such forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200527005478/en/
Gilead Contacts: Douglas Maffei, PhD, Investors (650)
522-2739
Marni Kottle, Media (650) 522-5388
Arcus Contact: Katherine Bock (510) 694-6231
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