Gilead Sciences, Inc. GILD and Tango Therapeutics announced that they have expanded their existing collaboration agreement focused on the discovery, development and commercialization of innovative targeted immune evasion therapies for cancer.
The companies had earlier collaborated in 2018. We note that Tango is a biotechnology company dedicated to discovering novel drug targets and delivering the next generation of targeted therapies to people with cancer.
Per the expanded multi-year collaboration, Tango will continue to leverage its proprietary, CRISPR-enabled functional genomics target discovery platform to identify novel immune evasion targets. The number of targets covered has gone up to 15 from five.
In exchange, Gilead will gain options to worldwide rights for programs directed at these targets over the next seven years. Gilead will also have the right to pay option extension fees for Tango to lead activities through early clinical development, for which the former will retain its option rights. Tango will have the option to co-develop and co-promote the lead products for up to five programs in the United States.
Gilead will make a $125-million upfront payment to Tango and a $20-million equity investment in the same. Additionally, Gilead will have the right to option up to 15 programs over the seven-year collaboration for up to $410 million per program in opt-in, extension and milestone payments.
Moreover, Tango will be entitled to receive up to low-double-digit tiered royalties on net sales. The companies will equally split profits and losses as well as development costs in the United States for those products that Tango opts to co-develop and co-promote. Further, Tango will be eligible to receive milestone payments and royalties on ex-U.S. sales.
Gilead has been taking strategic steps to strengthen its oncology pipeline. Last month, the company announced a $300-million investment to acquire a 49.9% equity interest in Tizona Therapeutics, Inc., a privately-held company developing first-in-class cancer immunotherapies.
Gilead has also made an equity investment of approximately $200 million in Arcus RCUS, an oncology-focused biopharmaceutical company working to create best-in-class cancer therapeutics.
Gilead’s shares have gained 6.4% in the year so far compared with the industry’s growth of 4.5%.
The company has been in the news since the start of this year as it leads the race for a possible treatment of coronavirus disease. It submitted a New Drug Application (NDA) for Veklury (remdesivir) to the FDA. The drug is an investigational antiviral for the treatment of patients with COVID-19. Veklury is currently available in the United States under an Emergency Use Authorization for the treatment of hospitalized patients with severe COVID-19.
Currently, there are no FDA-approved treatments for the severe illness caused by SARS-CoV-2. The pharma/biotech sector is running a race against time to come up with treatments and vaccines to cure the contagion.
Roche RHHBY initiated a late-stage study on its arthritis drug, Actemra/RoActemra, in combination with remdesivir in hospitalized patients with severe COVID-19 pneumonia. Alexion ALXN is also evaluating its rare disease drug, Ultomiris (ravulizumab-cwvz), for the COVID-19 infection.
Gilead currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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