-- The companies expand the scope of their
existing collaboration for CART-ddBCMA to include lymphomas --
-- Kite exercises option to Arcellx’s ARC-SparX
program ACLX-001 in multiple myeloma --
-- Arcellx to receive $200M equity investment
at $61.68 per share and an $85 million upfront cash payment --
Kite, a Gilead Company (NASDAQ: GILD), and Arcellx, Inc.
(NASDAQ: ACLX), today announced that the companies have expanded
their existing collaboration, which was originally announced in
December 2022.
Kite has exercised its option to negotiate a license for
Arcellx’s ARC-SparX program, ACLX-001, in multiple myeloma, which
is comprised of ARC-T cells and SparX proteins that target BCMA.
The companies have also expanded the scope of the collaboration for
Arcellx’s CART-ddBCMA to include lymphomas.
“We are pleased to see the momentum with the CART-ddBCMA
multiple myeloma program, enabling Kite to enter an area of high
unmet need and bring a new, potentially best-in-class cell therapy
to patients,” said Cindy Perettie, Executive Vice President of
Kite. “Given this, we are deepening our relationship with Arcellx
to further support advancement of CART-ddBCMA, bolster our pipeline
in multiple myeloma, as well as access opportunities in lymphoma.
In expanding our strategic partnership with Arcellx, we are
building upon the established synergy between Arcellx’s platform
technologies and Kite’s industry-leading position in CAR T
manufacturing and commercialization."
“Since entering into this strategic collaboration with Kite
almost one year ago, we are thrilled with how the partnership is
rapidly progressing and the alignment across our teams,” said Rami
Elghandour, Arcellx’s Chairman and Chief Executive Officer.
“Helping as many cancer patients as possible serves as the core of
our collaboration. With the deep and durable responses demonstrated
in our CART-ddBCMA Phase 1 trial in multiple myeloma, we believe
that our novel synthetic binder, the D-Domain, underscores the
potential to engineer a new class of CAR T therapies. We are
excited to deepen our relationship with Kite as they continue to
invest in our platform by exercising their rights to our ACLX001
ARC-SparX program in multiple myeloma and increasing their
investment in our company. With this additional investment from
Kite, our strengthened cash position is anticipated to extend our
runway into 2027, as we advance towards commercializing
CART-ddBCMA. Additionally, as our partnership deepens, we continue
to identify operational efficiencies and additional opportunities
to collaborate, which are also reflected in this agreement.
Importantly, these efficiencies embody the trust developed with our
Kite partners and do not alter the original agreement in principle
or economics. We look forward to sharing data from our CART-ddBCMA
Phase 1 trial at ASH in December.”
Upon closing, Arcellx will receive a $200 million equity
investment to purchase 3,242,542 shares of its common stock, which
is expected to extend the company’s cash runway into 2027.
Following this investment, Gilead’s estimated ownership will be
13%. Arcellx will also receive an upfront non-dilutive cash payment
of $85 million at closing and will be eligible for potential
milestone payments, including the advancement of lymphoma and the
license for ARC-SparX, as well as additional milestones, to offset
prespecified development costs over a limited period of time.
The transaction is expected to close around year-end 2023.
Closing of the transaction is subject to expiration or termination
of the waiting period under the Hart-Scott-Rodino Antitrust
Improvement Act and other customary conditions.
Beginning in the first quarter of 2022, consistent with recent
industry communications from the U.S. Securities and Exchange
Commission (SEC), Gilead no longer excludes acquired IPR&D
expenses from its non-GAAP financial measures. Assuming the
transaction closes by year-end 2023, we expect the transaction to
reduce Gilead’s GAAP and non-GAAP 2023 EPS by approximately
$0.09-$0.11 per share.
Wilson Sonsini Goodrich & Rosati is serving as legal counsel
to Arcellx.
About Arcellx and Kite
Collaboration
Arcellx and Kite, a Gilead Company, formed a global strategic
collaboration to co-develop and co-commercialize Arcellx's
CART-ddBCMA candidate for the treatment of patients with relapsed
or refractory multiple myeloma currently in a pivotal Phase 2
study. Kite and Arcellx will jointly advance and commercialize the
CART-ddBCMA asset in the United States, and Kite will commercialize
the product outside the U.S.
About CART-ddBCMA
CART-ddBCMA uses D-Domain (DD), which is designed to improve
target specificity while enhancing binding affinity, in lieu of a
scFv antigen recognition motif. DD is a small, stable, fully
synthetic binding agent with a hydrophobic core, and can
potentially enable higher transduction efficiency, high cell
surface expression, and low tonic signaling. The D-Domain binder
optimizes CAR T cell binding and killing of multiple myeloma
cells.
About Kite
Kite, a Gilead Company, is a global biopharmaceutical company
based in Santa Monica, California, focused on cell therapy to treat
and potentially cure cancer. As the global cell therapy leader,
Kite has treated more patients with CAR T-cell therapy than any
other company. Kite has the largest in-house cell therapy
manufacturing network in the world, spanning process development,
vector manufacturing, clinical trial production, and commercial
product manufacturing.
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.
Gilead acquired Kite in 2017.
About Arcellx, Inc.
Arcellx, Inc. is a clinical-stage biotechnology company
reimagining cell therapy by engineering innovative immunotherapies
for patients with cancer and other incurable diseases. Arcellx
believes that cell therapies are one of the forward pillars of
medicine and Arcellx's mission is to advance humanity by developing
cell therapies that are safer, more effective, and more broadly
accessible. Arcellx's lead product candidate, CART-ddBCMA, is being
developed for the treatment of relapsed or refractory multiple
myeloma (rrMM) in a Phase 2 pivotal trial. CART-ddBCMA has been
granted Fast Track, Orphan Drug, and Regenerative Medicine Advanced
Therapy designations by the U.S. Food and Drug Administration.
Arcellx is also developing its dosable and controllable CAR T
therapy, ARC-SparX, through two Phase 1 programs, ACLX-001 for rrMM
and ACLX-002 in relapsed or refractory acute myeloid leukemia and
high-risk myelodysplastic syndrome. For more information on
Arcellx, please visit www.arcellx.com. Follow Arcellx on X
(formerly known as Twitter) (@arcellx) and LinkedIn.
Arcellx Forward-looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements in this press release that are not purely
historical are forward-looking statements, including, without
limitation: anticipated completion of the proposed transaction,
including the closing of a proposed concurrent equity investment;
potential payments that may be received by Arcellx in connection
with the collaboration, including potential milestones and
royalties; and Arcellx’s and Kite’s respective rights and
obligations under the Collaboration Agreement, as amended;
Arcellx’s cash position following the closing of the transaction
and anticipated cash runway; Arcellx's plans for the clinical
development of its product candidates, including anticipated
announcements of additional data; Arcellx and Kite’s plans to
advance and commercialize CART-ddBCMA; and the potential impact of
Arcellx’s product candidates and platforms on patients and cell
therapy. The forward-looking statements contained herein are based
upon Arcellx's current expectations and involve assumptions that
may never materialize or may prove to be incorrect. These
forward-looking statements are neither promises nor guarantees and
are subject to a variety of risks and uncertainties, including,
without limitation: that the proposed transaction will be completed
in a timely manner or at all, the possibility that certain closing
conditions to the proposed transaction will not be satisfied;
uncertainty as to whether the anticipated benefits and
opportunities of the proposed collaboration may not be realized or
make take longer to realize or may cost more than expected; risks
of unexpected hurdles, costs or delays; challenges in technology
transfer and cell therapy manufacturing, particularly scaling up to
commercial supply volumes, which could limit the benefits of the
collaboration; challenges inherent in new product candidate
development, including the uncertainty of clinical success and
obtaining regulatory approvals; challenges associated with
collaborating with third parties, including intellectual property,
operational, financial and other risks; uncertainty of commercial
success for new products; the ability of Arcellx and Kite to
successfully execute their strategic plans; and risks that may be
found in the section entitled Part II, Item 1A (Risk Factors) in
the Quarterly Report on Form 10-Q for the quarter ended September
30, 2023, filed with the Securities and Exchange Commission (SEC)
on November 13, 2023, and the other documents that Arcellx may file
from time to time with the SEC. These forward-looking statements
are made as of the date of this press release, and Arcellx assumes
no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
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 the transaction in
a timely manner or at all; the possibility that various closing
conditions for the transaction may not be satisfied or waived,
including the possibility that a governmental entity may prohibit,
delay or refuse to grant approval for the consummation of the
transaction; difficulties or unanticipated expenses in connection
with the collaboration, including with respect to the development
of ARC-SparX, CART-ddBCMA or other programs subject of the
collaboration; the ability of the parties to initiate, progress or
complete clinical trials within currently anticipated timelines or
at all, and the possibility of unfavorable results from ongoing or
additional clinical studies, including those involving ARC-SparX,
CART-ddBCMA or other programs subject of the collaboration;
uncertainties relating to regulatory applications and related
filing and approval timelines for ARC-SparX, CART-ddBCMA or other
programs subject of the collaboration, including the risk that FDA
may not approve any such programs on the currently anticipated
timelines or at all, and any marketing approvals, if granted, may
have significant limitations on its use; the possibility that the
parties may make a strategic decision to terminate this
collaboration or make a strategic decision to discontinue
development of the programs subject of the collaboration at any
time, and as a result, such programs may never be commercialized;
the risk that Gilead and Kite may not realize the anticipated
benefits of the collaboration with Arcellx; the risk that Gilead’s
investment in Arcellx will lose value for any number of reasons;
the potential effect of any of the foregoing on Gilead and Kite’s
earnings; 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, 2023, 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. The reader is cautioned that
any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and is cautioned
not to place undue reliance on these forward-looking statements.
All forward-looking statements are based on information currently
available to Gilead and Kite, and Gilead and Kite assume no
obligation and disclaim any intent to update any such
forward-looking statements.
Kite, the Kite logo and GILEAD are trademarks
of Gilead Sciences, Inc. or its related companies.
For more information on Kite, please visit the
company’s website at www.kitepharma.com. Follow Kite on social
media on X (@KitePharma) and LinkedIn.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231115703067/en/
Kite Contacts: Investors: Jacquie Ross
investor_relations@gilead.com
Media: Tracy Rossin trossin@kitepharma.com
Arcellx Contacts: Investors: Myesha Lacy ir@arcellx.com
510-418-2412
Media: Andrea Cohen Sam Brown Inc.
andreacohen@sambrown.com 917-209-7163
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