Gilead Sciences (GILD) has announced that it will invest $300 million to acquire a 49.9 percent equity interest in Tizona Therapeutics, Inc., a privately held company developing first-in-class cancer immunotherapies.
Gilead will also receive an exclusive option to acquire the remainder of Tizona for up to an additional $1.25 billion, including an option exercise fee and potential future milestone payments.
Gilead can exercise its option to acquire the remainder of Tizona following the readout of a Phase 1b study of Tizona’s investigational antibody, TTX-080, or earlier if Gilead decides to do so.
TTX-080, discovered by Tizona, is a potential first-in-class medicine that targets HLA-G, a novel and emerging immune checkpoint expressed across multiple tumor types. The expression pattern of HLA-G often appears distinct from that of PD-(L)1, suggesting potential utility to address tumors that do not respond to current anti-PD-(L)1 treatments and to deepen responses in tumors that are sensitive to anti-PD-(L)1 therapies.
The U.S. Food and Drug Administration has cleared Tizona’s Investigational New Drug (IND) application for TTX-080, and in the third quarter of this year, Tizona plans to initiate a Phase 1 clinical trial evaluating TTX-080 both as a monotherapy and in combination with other agents in patients with advanced cancers.
“Tizona is pursuing first-in-class cancer immunotherapies that could make an important difference in oncology by helping patients who don’t respond to current checkpoint inhibitors,” said Daniel O’Day, CEO of Gilead Sciences. “This agreement with Tizona adds to the significant progress we’ve made in the first half of this year in building out a strong and diverse immuno-oncology pipeline. We now have multiple opportunities to develop novel therapies that will improve the treatment of cancer.”
The transaction is expected to close in the third quarter of this year and is subject to antitrust clearance and other customary closing conditions.
Gilead will have the right to appoint two individuals to Tizona’s Board of Directors upon closing of the transaction.
Tizona will spin off TTX-030, the company’s investigational, first-in-class anti-CD39 antibody partnered with AbbVie (ABBV), into a separate entity prior to closing of this transaction. TTX-030 is not subject to this agreement.
Shares in Gilead have surged 20% year-to-date, and analysts have a cautiously optimistic Moderate Buy consensus on the stock. That’s with an average analyst price target of $81 (4% upside potential). (See GILD stock analysis on TipRanks).
“Most investor eyes have been on remdesivir of late, and assessing the potential for GILD to monetize that COVID-19 treatment” commented RBC Capital analyst Brian Abrahams earlier this month.
“However, we believe that even in the likely case they are able to derive revenue from remdesivir, it would likely be only for the very near term, and the much more important potential value driver remains GILD’s ability to maintain their HIV leadership and revenue durability long-term” the analyst told investors. He has a buy rating on GILD and $89 price target.
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