Gilead pays to retain rights to Arcus cancer drugs

Dive brief:

  • Gilead will pay $ 725 million to retain the rights to four experimental cancer immunotherapies developed by Arcus Biosciences, Thursday announcement that it would confirm an option agreement the two companies signed in 2020. The most advanced projects involved are aimed at a cellular target called TIGIT which is of increasing interest to drugmakers hoping to follow the success of Merck & ‘s Keytruda. Co. and others like it. .
  • As part of the license agreement, the two companies will share global development costs and share the costs and benefits of commercialization in the United States, with Gilead leading marketing outside the United States and paying royalties to Arcus on these sales. Arcus will also lead the development of at least two additional preclinical targets that the two companies will jointly identify.
  • The deal is the latest in a long-standing effort by Gilead, which has made a name for itself in antiviral drugs, to expand into oncology. The company has gained approval for three cancer drugs in the past four years, but sales of its HIV drugs still eclipse those of its oncology business.

Dive overview:

The initial agreement between Gilead and Arcus gave the largest drugmaker the rights to an investigational drug called zimberelimab, which attacks cancers using the same mechanism as Keytruda, as well as a licensing option for the four projects covered by Thursday’s announcement.

In June, Arcus announced the first positive results of a phase 2 trial of zimberelimab and its main anti-TIGIT agent, called domvanalimab, in previously untreated lung cancer. This trial tests zimberelimab, which targets a protein called PD-1, against a combination of zimberelimab and domvanalimab, and another treatment regimen of the two drugs with an additional Arcus drug called etrumadenant. Etrumadenant is also part of the deal announced Thursday.

While Arcus has not released detailed data on this trial, the positive results seen so far have likely prompted Gilead to sign up. Brian Abrahams, analyst at RBC Capital Markets, wrote in a note to clients that Gilead executives had signaled they would authorize Arcus drugs if they were able to shrink or eliminate tumors in at least half of patients registered.

Along with the deal, Gilead and Arcus announced they would release data from the Phase 2 trial, including results on how long the suits kept patients from getting sicker, at a meeting medical in 2022. In first-line lung cancer, Keytruda set a bar record; shrinking or eliminating tumors in 48% of patients and preventing patients from progressing or dying for a median of 8.8 months, Brian Skorney, analyst at Baird, wrote in a note to clients.

Meanwhile, Arcus has already initiated a phase 3 trial of zimberelimab alone and in combination with domvanalimab in lung cancer, which is scheduled to be read in 2025.

Gilead and Arcus face stiff competition, however. Merck and Roche also have anti-TIGIT agents that they are testing alongside PD-1 drugs, with Roche, called tiragolumab, obtain a revolutionary therapy designation from the Food and Drug Administration based on data from Phase 2.

Arcus shares rose 14% on the news, trading above $ 42 apiece on Thursday morning.

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