Gilead plans to invest $300 million for just shy of a 50% stake in Tizona Therapeutics, a privately held company developing drugs that use the body’s immune system to fight cancer. Gilead will also hold an exclusive option to acquire the rest of Tizona for as much as $1.25 billion.Per deal terms, Gilead can pursue an all-out acquisition either before or after an early human study of Tizona’s experimental drug TTX-080 reads out. The companies expect that study to begin in the third quarter.Tizona is the latest in a string of deals meant to strengthen Gilead’s place in the highly competitive arena of cancer drug development. Under the leadership of Roche veteran Daniel O’Day, the big biotech spent roughly $5 billion this year to acquire Forty Seven, another immuno-oncology company. Since then, Gilead has shelled out hundreds of millions of dollars to take equity stakes in the cancer-focused biotechs Pionyr Therapeutics and Arcus Biosciences.
Gilead made its first major move into cancer drugmaking with the purchase of cell therapy specialist Kite Pharma back in 2017. And while the deal has resulted in one approved product, the blood cancer medicine Yescarta, its sales far from offset the $12 billion Gilead shelled out. Recent writedowns suggest the company knows it overpaid.
Still, Gilead continues to invest heavily in cancer drugs, likely encouraged by the blockbuster products that fellow large drugmakers have added to their portfolios. In immuno-oncology, for example, Merck & Co.’s drug Keytruda surpassed $11 billion in sales last year, and by some estimates is on track to becoming the world’s top-selling medicine.
Though Keytruda and drugs similar to it have revolutionized how certain cancers are treated, they don’t work for everyone. In some tougher-to-treat cancers, they don’t work for most patients.
That’s one place where Gilead sees value in Tizona and, specifically, TTX080.
An experimental antibody, TTX080 is meant to block a protein called HLA-G that is involved in suppressing the immune system. Gilead claims the drug could be the first of a new class of medicines, and provide an option to patients who don’t respond to treatments that target a cell-signaling pathway known as PD-1 — treatments that include Keytruda, Bristol Myers Squibb’s Opdivo and Roche’s Tecentriq.
“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,” O’Day, Gilead’s CEO, said in a July 21 statement.
The Tizona deal aligns with the strategy Gilead seems to have adopted since O’Day took the helm. Rather than pursue outright acquisitions, the company has favored licensing options that allow it to take control of drugs if they show promise after certain stages of clinical testing.
Like with Tizona, the Pionyr and Arcus deals saw Gilead pay hundreds of millions of dollars in upfront cash and equity, and dangle more than $1 billion in future payments, all in exchange for access to their immuno-oncology assets. And in the case of Pionyr, Gilead holds an option to acquire the remaining 50.1% of the privately held company’s shares.
According to Gilead, the Tizona deal is expected to close in the third quarter.
The deal also affects AbbVie, which inked an agreement with Tizona last year that gave it an equity stake in the biotech while locking down exclusive rights to another one of its immuno-oncology drugs.
Now, due to the Gilead arrangement, Tizona said it will spin off the AbbVie-partnered drug into a separate entity.