Arcus (RCUS) & Gilead Re-Collaborate for Inflammatory Diseases
Arcus Biosciences RCUS and its partner, Gilead Sciences GILD, announced the expansion of their existing collaboration to include research and development of drug candidates for inflammatory diseases. Shares of RCUS soared almost 6% following the announcement.
The companies will jointly select up to four targets applicable to inflammatory diseases, with Arcus receiving an upfront payment of $35 million. Gilead may exercise its option to license each program at two separate, pre-specified time points.
If GILD exercises its option at the earlier time point for the first two target programs, RCUS will be eligible to receive up to $420 million in option and milestone payments and tiered royalties for each optioned program. Both companies will co-develop the optioned programs, share global development costs and co-commercialize them in the United States.
The partnership will leverage Arcus' expertise in small molecule drug discovery and immunology, as well as the latter’s clinical experience in inflammation. The collaboration is built on GILD’s presence in the inflammatory disease space, marking a significant step toward expanding Arcus' capabilities and portfolio beyond oncology.
The existing oncology collaboration between Arcus and Gilead was made in 2020, under which Gilead was granted an exclusive license to develop and commercialize zimberelimab, an anti-PD-1 program, in certain markets.
It also provided GILD with time-limited options to acquire exclusive licenses for any of Arcus' current and future clinical programs during the 10-year collaboration term.
In 2021, an amended collaboration agreement was made, and Gilead exercised its option for three programs: domvanalimab and AB308 (collectively known as the anti-TIGIT program), etrumadenant (adenosine receptor antagonist program) and quemliclustat (CD73 program). Both companies share the global costs related to these programs.
Shares of Arcus have fallen 5.6 % year to date compared with the industry’s 5.2% decline.
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In the first quarter of 2023, Arcus reported total revenues of $25 million. The entire amount was derived from collaboration revenues.
The latest expanded collaboration is expected to accelerate the progress in developing transformative new therapies for inflammatory diseases. The research collaboration is an important step toward advancing innovative therapies for patients in need.
Arcus Biosciences, Inc. Price and Consensus
Arcus Biosciences, Inc. price-consensus-chart | Arcus Biosciences, Inc. Quote
Zacks Rank and Other Stocks to Consider
Currently, Arcus carries a Zacks Rank #2 (Buy).
A couple of other top-ranked stocks in the same sector are Ocuphire Pharma OCUP and Allogene Therapeutics ALLO. While Ocuphire Pharma sports a Zacks Rank #1 (Strong Buy), Allogene Therapeutics carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Loss per share estimates for Ocuphire Pharma have narrowed from 29 cents to 24 cents for 2023 and from 86 cents to 81 cents for 2024, in the past 60 days.
The company’s shares have surged 42.2% in the year-to-date period. Ocuphire’s earnings beat estimates in three of the last four quarters and missed the mark in one, the average surprise being 23.85%.
Loss per share estimates for Allogene have narrowed from $2.56 to $2.31 for 2023 and from $2.53 to $2.20 for 2024, in the past 60 days. Shares of ALLO have surged 7.1% in the year-to-date period.
Allogene’s earnings beat estimates in three of the last four quarters and missed the mark in one, the average surprise being 5.08%.
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