Pharmaceutical giant Gilead Sciences revealed Monday it will acquire cancer therapy company Arcellx for up to $7.8 billion in its largest acquisition since 2020. The deal centers around an experimental blood cancer treatment currently under FDA review, with a decision expected by December.
Pharmaceutical company Gilead Sciences announced Monday it will acquire cancer drug developer Arcellx for as much as $7.8 billion, marking the company’s most significant acquisition in four years as it seeks to expand its cancer treatment portfolio.
The biopharmaceutical giant, known primarily for its HIV medications and liver disease therapies, is pursuing growth opportunities outside its traditional strongholds while facing reduced revenue from its COVID-19 treatment Veklury and anticipating future patent expirations.
Under the agreement, Gilead will offer $115 cash per share, representing a 79% markup over Arcellx’s previous closing price.
Market reaction was swift, with Arcellx stock surging 78.5% to $114.46 in pre-market trading, while Gilead shares dropped approximately 1%.
The transaction represents Gilead’s most substantial deal since its $21 billion purchase of Immunomedics, which provided access to Trodelvy, a specialized drug combination for treating advanced breast cancer.
Gilead’s subsidiary Kite Pharma had been collaborating with Arcellx on the development and commercialization of anito-cel, an investigational CAR-T treatment targeting multiple myeloma, a blood cancer affecting bone marrow.
CAR-T therapy represents an innovative cancer treatment approach that genetically modifies patients’ immune cells to locate and destroy cancerous cells.
Federal regulators are currently evaluating anito-cel as a fourth-line therapy option for patients whose multiple myeloma has returned or proven resistant to other treatments, with an FDA determination anticipated by December 23.
“Beyond the potential launch this year, anito-cel could become a foundational treatment for multiple myeloma over time, including earlier lines of therapy,” stated Gilead Chief Executive Daniel O’Day.
O’Day explained that anito-cel’s distinctive targeting capabilities could enable Gilead to create advanced cellular therapies, bolstering the company’s prospects in cancer and inflammatory disease treatment.
Following FDA clearance of anito-cel, the acquisition is projected to boost earnings per share starting in 2028 and continuing thereafter.
Additionally, Gilead has committed to paying Arcellx stockholders an extra $5 per share if anito-cel achieves worldwide sales totaling at least $6 billion between its launch and the end of 2029.