Gilead enters ADC option and license pact with Tubulis, sees dilution

Gilead (GILD) and Tubulis announced that they have entered into an exclusive option and license agreement to discover and develop an antibody-drug conjugate, or ADC, against a solid tumor target. Through this agreement, Gilead will gain access to Tubulis’ proprietary Tubutecan and Alco5 platforms. The companies will collaborate to select the best technology to utilize, with Tubulis leading discovery and development efforts to design a Topoisomerase I inhibitor-based ADC candidate with superior biophysical properties and stability to address current treatment challenges such as durability and off-target toxicity. Under the terms of the agreement, Tubulis will receive an upfront payment of $20M and, if Gilead exercises its option, a separate option exercise fee of $30M. In addition, Tubulis will be eligible for development and commercialization milestone payments totaling up to $415M, plus mid-single to low double-digit tiered royalties on sales of marketed products resulting from the collaboration. Tubulis will lead early-stage research and development activities for the ADC program. If Gilead exercises its option to exclusively license the program, Gilead will be responsible for further development and commercialization activities for all products resulting from the collaboration. Gilead does not exclude acquired IPR&D expenses from its non-GAAP financial measures. This transaction with Tubulis is expected to reduce Gilead’s GAAP and non-GAAP 2024 EPS by approximately $0.01.