Gilead Sciences, Inc. GILD entered into an exclusive option and license agreement with Tubulis, a Germany-based biotech company.

The collaboration is aimed at discovering and developing an antibody-drug conjugate (ADC) against a solid tumor target.

Gilead’s shares have risen 14.2% year to date against the industry's decline of 6.9%.

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More on GILD’s Deal With Tubulis

The single-asset focused collaboration, license and option agreement combines Tubulis’ differentiated ADC platform technologies with Gilead’s research and development expertise in oncology.

Per the terms of the agreement, Gilead will gain access to Tubulis’ proprietary Tubutecan and Alco5 platforms. In exchange, Tubulis will receive an upfront payment of $20 million and, if Gilead exercises its option, a separate option exercise fee of $30 million. Additionally, it will be eligible for development and commercialization milestone payments of up to $415 million, along with mid-single to low double-digit tiered royalties on sales of marketed products resulting from the collaboration.

Tubulis will also lead early-stage research and development activities for the ADC program. If Gilead exercises its option to exclusively license the program, it will be responsible for further development and commercialization activities for all products resulting from the collaboration.

This collaboration with Tubulis is expected to reduce Gilead’s bottom line by approximately $0.01.

GILD Looking to Strengthen Pipeline

Gilead is looking to strengthen its pipeline through strategic acquisitions and deals. It had earlier entered into a research collaboration, option and license agreement with Merus MRUS to discover novel dual tumor-associated antigens targeting trispecific antibodies.

Gilead and Merus agreed to collaborate on using the latter’s proprietary Triclonics platform and Gilead’s oncology expertise to research and develop multiple, separate preclinical research programs.

The acquisition of clinical-stage biopharmaceutical company, CymaBay Therapeutics, added seladelpar to Gilead’s pipeline. The candidate was recently approved under the brand name Livdelzi for the treatment of primary biliary cholangitis, in combination with ursodeoxycholic acid (UDCA), in adults who have had an inadequate response to UDCA or as monotherapy in patients unable to tolerate UDCA.

Gilead’s oncology portfolio, comprising the Cell Therapy franchise and breast cancer drug Trodelvy, has diversified the company’s overall business. However, the Cell Therapy franchise, comprising Yescarta and Tecartus, is under pressure due to competitive headwinds, which are expected to continue in 2025.

The company’s strategic deals and acquisitions to diversify its business are encouraging. Gilead’s efforts to constantly innovate its HIV portfolio should enable it to maintain growth amid competition from GSK plc GSK.

GSK posted 8% growth in HIV sales in the third quarter, driven by strong patient demand for two drug regimens — Dovato and Juluca — and long-acting drugs (Cabenuva and Apretude).

Gilead has collaborated with Merck MRK to evaluate the investigational combination of islatravir and lenacapavir for the treatment of HIV. Recent data showed that a treatment switch to an investigational oral once-weekly combination regimen of islatravir and lenacapavir maintained viral suppression in adults at week 48.

Islatravir is Merck’s investigational nucleoside reverse transcriptase translocation inhibitor under evaluation in multiple ongoing early and late-stage clinical studies in combination with other antiretrovirals for the treatment of HIV-1.

GILD's Zacks Rank

Gilead currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


 

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