Gilead subsidiary enters CART-ddBCMA commercialization agreement, sees dilution

Kite, a Gilead company and Arcellx announced a global strategic collaboration to co-develop and co-commercialize Arcellx’s lead late-stage product candidate, CART-ddBCMA, for the treatment of patients with relapsed or refractory multiple myeloma. Multiple myeloma is an incurable disease for most patients and the need remains for effective, safe, and broadly accessible therapies. Upon closing, Arcellx will receive an upfront cash payment of $225M and $100M equity investment as well as other potential contingent payments. The companies will share development, clinical trial, and commercialization costs for CART-ddBCMA and will jointly commercialize the product and split U.S. profits 50/50. Outside the US, Kite will commercialize the product and Arcellx will receive royalties on sales. Kite will be responsible for the development and commercialization costs for any product under the collaboration that is not co-commercialized. After completion of the technical transfer, Kite will be responsible for manufacturing. The transaction is expected to close in the first quarter of 2023. Closing of the transaction is subject to expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. Beginning in the first quarter of 2022, consistent with guidance from the U.S. Securities and Exchange Commission, Gilead no longer excludes acquired IPR&D expenses from its non-GAAP financial measures and expects the transaction with Arcellx to reduce Gilead’s GAAP and non-GAAP 2023 EPS by approximately $0.16. Bank of America is acting as financial advisor to Kite.