USA – US biotech giant Gilead Sciences announced that it has exercised its options on three Arcus Biosciences investigational cancer molecule development and explore treatment combinations across the two portfolios after being encouraged by early clinical data.
The pair, which signed a deal worth up to US$2 billion last May, have been circling a buyout, but Gilead appears content with its research and development collaboration for the time being, releasing US$725 million to exercise an option on a trio of cancer assets.
These are Arcus’ anti-TIGIT molecules, domvanalimab and AB308, as well as etrumadenant and quemliclustat, the latter two of which are A2a/A2b adenosine receptor antagonists and small molecule CD73 inhibitors respectively.
In May 2020, the two companies agreed to a ten-year collaboration that gave Gilead immediate access to one candidate, zimberelimab – an anti-programmed cell death protein-1 (PD-1) monoclonal antibody – as well as the option to participate in other Arcus programs.
Gilead made a US$200 million equity investment in Arcus in that deal, which was followed in February by a US$220 million investment.
The options will cost Gilead US$745 million, but the agreement means that a US$100 million payment due in 2022 will not be made.
Arcus CEO Terry Rosen added: “The early exercise of Gilead’s options will now ensure that Arcus is well positioned to accelerate and expand clinical development activities so that it may deliver benefit to patients with some of the most difficult to treat cancers, including pancreatic, lung, colon and prostate.”
They will work together to develop the drugs and split the global costs. If the molecules Gilead optioned are approved by regulators, they will co-commercialize and split profits equally in the United States.
Outside of the United States, Gilead has exclusive rights, with exceptions to any of Arcus’s existing collaboration agreements. Arcus will receive tiers of royalties from Gilead.
The 2020 agreement was also modified as a result of this. Arcus may be required to run at least half of the clinical trials, splitting the costs with Gilead.
Ex-US royalties for the three programs were reduced from the low twenties to the mid-twenties. Arcus will be in charge of drug discovery and early development against two novel research targets selected by both companies.
For example, Gilead will be able to pursue chemotherapy-free regimens with Trodelvy in combination with optioned Arcus therapies.
If the deal is approved by antitrust regulators, the two companies expect the transaction to close by the end of the year.
As part of the agreement, the companies will co-develop and share the global costs of clinical programs, as well as share US profits if any molecules are approved, though Gilead will retain exclusive rights outside of the US.
Meanwhile, Arcus has already begun a Phase 3 trial of zimberelimab alone and in combination with domvanalimab in lung cancer, which is scheduled to be completed in 2025.
However, Gilead and Arcus will face stiff competition. Merck and Roche are also testing anti-TIGIT agents alongside PD-1 drugs, with Roche’s tiragolumab receiving Breakthrough Therapy designation from the FDA based on Phase 2 data.