Gilead deepens immuno-oncology push with Agenus deal
- Gilead Sciences will dive deeper into immuno-oncology research, announcing Thursday a deal with the biotech Agenus for access to five preclinical compounds, including two bispecific cancer therapies.
- The larger biotech will pay $150 million upfront to Agenus and will line up milestone payments that could push the deal's total value as high as $1.7 billion. Specifically, Gilead gets exclusive global rights to one bispecific antibody expected to enter clinical testing by year end, as well as option rights on another bipsecific and a CD137 agonist. Gilead has right of first negotiation for two other, undisclosed preclinical programs.
- Shares in Agenus jumped by more than 40% when markets opened Thursday, before falling back to trade up 30%. Gilead shares remained relatively flat.
The deal in immuno-oncology, one day after announcing a separate NASH deal, are the latest signals of a Gilead future that's less reliant on its hepatitis C business, a therapeutic area that's become considerably less profitable for the biotech in recent years.
Earlier this month, Gilead tapped Daniel O'Day, a veteran Roche executive, as successor to outgoing CEO John Milligan. O'Day will take over on on March 1, 2019 and is expected to invest further in cancer, particularly given his past role at a leading cancer drugmaker.
This Agenus deal, company execs said, will complement the Foster City, California-based biotech's oncology and cell therapy offerings, which are headlined by Yescarta (axicabtagene ciloleucel). Acquired in a $12 billion deal for Kite Pharma, Yescarta has made Gilead a leader in CAR-T cell therapy, although worries have emerged around the treatment's growth prospects.
Bispecifics, antibodies that bind to two targets rather than one, have gained fresh attention and were a focus of investors and analysts at the American Society of Hematology's recent annual meeting.
Now, Gilead will get in on development of the cancer therapies, lining up behind Amgen, Roche and Regeneron in the emerging field.
The specifics of the Agenus deal can be divided into immediate and future actions.
Once the deal closes, Gilead will get exclusive worldwide rights on AGEN1423, which is expected to enter clinical testing by year end. In return, Agenus will get $120 million in cash and a $30 million equity investment at a premium of $2.70 per share.
Agenus CEO Garo Armen noted on a Thursday investor call that the company expects to receive the majority of a $37.5 million milestone in 2019, without saying what specifically would trigger that payment.
Over the longer term, Gilead gains options to exclusively license two more compounds: AGEN1223, a preclinical bispecific antibody, and AGEN2373, the CD137 agonist. Gilead can wait on making a decision until 90 days after the company receives completed Phase 1b clinical data on each program.
Gilead would also pay $50 million for each exercised license, and each program — if exercised — could yield Agenus up to $530 million upon meeting certain development and commercial goals.
In another contract wrinkle, Agenus will have an opt-in right to evenly share R&D and commercialization costs along with profits on one — but not both — of these programs.
For Agenus, the company is not done pursuing partnerships, according to Armen, who remarked they remain in some "quite advanced" talks with other companies, and anticipate multiple new partnerships throughout 2019.
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