Gilead (GILD), Compugen Collaborate for Immunotherapy Program
Gilead Sciences, Inc. GILD entered into an agreement with clinical-stage cancer immunotherapy company, Compugen Ltd. CGEN, to license its pre-clinical immunotherapy program.
Per the terms of this license agreement, Compugen is responsible for the ongoing pre-clinical development and the future phase I study of immuno-oncology candidate COM503, following which, Gilead will assume the rights to develop and commercialize COM503.
The company will make an upfront payment of $60 million to Compugen. CGEN is also eligible for a milestone payment of $30 million subject to investigational new drug clearance of COM503, expected in 2024.
Compugen is entitled to get up to an additional $758 million in future development, regulatory and commercial milestone payments, with a total deal value of $848 million, along with single-digit to low double-digit tiered royalties on worldwide net sales.
COM503 is a potential first-in-class, high-affinity antibody that blocks the interaction between IL-18 binding protein and IL-18, thereby releasing natural IL-18 in the tumor microenvironment and inhibiting cancer growth.
The license agreement will reduce Gilead’s bottom line by approximately 3-5 cents.
Shares of Compugen surged 174% on the license news, while GILD lost 0.01%. Shares of Gilead have lost 7.4% year to date compared with the industry’s decline of 18%.
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GILD is now targeting the lucrative oncology market and aims to expand beyond the virology business.
The oncology business put up a stellar performance in 2023, boosting its top line. The Cell Therapy franchise, comprising Yescarta and Tecartus, also continues to witness a steady increase in sales, primarily due to higher demand for Yescarta in relapsed or refractory (“R/R”) large B-Cell lymphoma and Tecartus in R/R acute lymphoblastic leukemia and mantle cell lymphoma. The uptake of the breast cancer drug Trodelvy has also been strong.
The company recently expanded its partnership with Arcellx ACLX to develop CART-ddBCMA to treat lymphomas. Gilead’s subsidiary Kite and Arcellx initially entered into a strategic partnership in December 2022 to co-develop and co-commercialize the latter’s lead late-stage product candidate, CART-ddBCMA, in multiple myeloma. Following the expansion of the collaboration scope, the companies will develop CART-ddBCMA to treat lymphomas.
Kite also 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.
Gilead has also partnered with Arcus RCUS to evaluate the combinations of domvanalimab plus zimberelimab (doublet) and domvanalimab plus zimberelimab and etrumadenant (triplet) versus zimberelimab monotherapy in patients with first-line, metastatic PD-L1-high non-small cell lung cancer.
GILD and Arcus recently announced that domvanalimab plus zimberelimab and chemotherapy showed an encouraging overall response rate and six-month progression-free survival rate results in a preliminary analysis from Arm A1 of the EDGE-Gastric study.
This data supports the ongoing phase III study, STAR-221, in unresectable or metastatic upper gastrointestinal cancers. Gilead and Arcus have three additional ongoing phase III registrational studies of domvanalimab-containing regimens in lung cancer, including STAR-121, ARC-10 and PACIFIC-8.
The company is poised to gain further inroads in the oncology market in 2024 as Trodelvy propels growth and additional label expansion of the drug (lung cancer), which will fuel sales. HIV therapy Biktarvy should also maintain momentum in 2024. GILD has a deep pipeline with 60 ongoing clinical programs spanning virology, oncology and inflammation.
Gilead currently has 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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