Gilead Sciences, Arcus Biosciences expand partnership to include research programs in inflammation

“We are pleased to build upon Gilead’s efforts in inflammation with the expansion of our strategic collaboration with Arcus,” said Flavius Martin, M.D., Executive Vice President, Research, Gilead Sciences. “Gilead is committed to accessing innovative approaches to address the significant unmet medical needs across a range of inflammatory conditions, and this expanded collaboration with Arcus underscores that commitment. Arcus is an excellent partner with clear strengths in discovery and development, and we believe this partnership will significantly accelerate our progress in developing transformative new therapies for inflammatory diseases.”

“Since its founding, Arcus has been creating and developing therapeutic interventions that can modulate the immune system to treat cancer. Through this expansion of our partnership with Gilead, we can combine our research expertise in immunology and small molecule drug discovery with Gilead’s strong clinical experience in inflammation,” said Terry Rosen, Ph.D., Chief Executive Officer, Arcus. “Our two companies have a strong, broad and productive relationship and together, we aspire to advance innovative new therapies for patients in need. The research collaboration facilitates much earlier alignment between Gilead and Arcus on our discovery and development activities, while enabling Arcus to expand into inflammation in a capital-efficient manner.”

Under the terms of the expanded collaboration, Arcus will receive an upfront payment of $35 million and will initiate research programs against up to four targets jointly selected by the parties that are applicable to inflammatory diseases. Gilead may exercise an option to license each program at two separate, prespecified time points. If Gilead exercises its option at the earlier time point for the first two target programs, Arcus would be eligible to receive up to $420 million in option and milestone payments and tiered royalties for each optioned program. For any other option exercise by Gilead for the four target programs, the parties would have rights to co-develop and share global development costs and to co-commercialize and share profits in the United States for optioned programs.

Beginning in the first quarter of 2022, consistent with recent industry communications from the U.S. Securities and Exchange Commission (SEC), Gilead no longer excludes acquired IPR&D expenses from its non-GAAP financial measures. This transaction with Arcus is expected to reduce Gilead’s GAAP and non-GAAP 2023 EPS by $0.02.