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Gilead is expanding its collaboration with cancer cell therapy developer Arcellx, announcing Wednesday that subsidiary Kite Pharma has used an option to license a second experimental drug. The partners will also broaden their collaboration on a cell therapy that was the subject of the initial partnership.
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Per deal terms, Gilead will buy $200 million of Arcellx shares, giving it a 13% stake, as well as pay an $85 million cash fee. Arcellx will be owed undisclosed payments on achievement of development milestones “to offset prespecified development costs,” according to Gilead.
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Last year, Gilead paid $225 million upfront and made a $100 million investment in Arcellx to secure access to the first drug in the collaboration, a type of cancer treatment called CAR-T therapy, which engineers a patient’s own immune cells to attack tumors.
Dive Insight:
With this deal, Gilead now has rights in the U.S. to co-develop and co-commercialize the initial drug in its partnership with Arcellx, called CART-ddBCMA, in lymphoma as well as multiple myeloma. (Gilead has exclusive rights to market the product outside the U.S.)
The expansion also adds a Gilead license to a more recent CAR-T project called ACLX-001 for multiple myeloma.
Gilead’s investment at $61.68 a share represents a 30% premium over Arcellx’s closing price Tuesday. The cash infusion will help Arcellx fund operations through 2027, one year longer than the company had previously announced.
Through its $12 billion acquisition of Kite and follow-up deals like with Arcellx, Gilead has made a big bet on CAR-T therapy. Gilead recorded sales of $1.4 billion for its two marketed CAR-T drugs through the first nine months of 2023, and with Arcellx it has doubled the size of its CAR-T pipeline.
The collaboration gives Gilead two pipeline projects in multiple myeloma, a blood cancer that two CAR-T therapies are approved to treat in the U.S.
CAR-T drugs can stimulate deep and durable responses in patients with cancers like leukemia, lymphoma and multiple myeloma. But because they are derived from patients’ own cells and entail a lengthy manufacturing process, they are expensive and cumbersome to use.
The technologies behind Arcellx’s drugs aim to improve manufacturing efficiency and targeting of cells, reduce side effects, and allow for targeting of multiple proteins expressed on tumor cells. If successful, Arcellx says its approach could shorten manufacturing cycles and reduce costs.
The partnership has already hit a setback, however. One patient died during the Phase 2 trial of CART-ddBCMA, prompting a Food and Drug Administration hold that was lifted after the FDA authorized more types of “bridging therapies” that help keep disease in check while patients await treatment.
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