Gilead buys Arcellx before it’s over the finish line

Arcellx’s BCMA-targeting Car-T hope anitocabtagene autoleucel faces a US approval decision in the second half of this year, but Gilead has decided not to wait for the FDA’s verdict, opting to strike now with a $7.8bn buyout. The companies had collaborated since Gilead first licensed anito-cel rights in December 2022.

In oncology the deal is the biggest takeover since Genmab paid $8bn to buy Merus last September, and comes at an important time, when biotech investors are hoping that a recent upturn in sentiment doesn’t evaporate. It’s good news for Arcellx holders, who will receive a 79% premium, though some of the most bullish followers might be disappointed.

Last October Arcellx shares hit a high of $94, a price not too far off the $115 that Gilead is paying in the deal announced on Monday. But then the ASH conference was a non-event for Arcellx, and the stock lost about 30% to the end of last year as anito-cel’s key competitor, Legend/J&J’s Carvykti, became a multiple myeloma blockbuster.

Take the money

Given such competition, and the fact anito-cel won’t even be approved for at least another 10 months, Arcellx is probably wise to take Gilead’s money and run. The deal additionally gives holders a contingent value right of $5 per share, payable if anito-cel hits cumulative sales of at least $6bn from launch until the end of 2029.

Whether it does so depends firstly on the FDA – though approval in the late-line multiple myeloma setting initially being sought should be a no-brainer – and secondly on keen uptake backed by claims of improved safety versus Carvykti, followed by expansion into early therapy lines.

The last is probably the biggest unknown at present, but it will be the main battleground on which anito-cel will have to prove itself. And the competition could soon feature not just Carvytki, approved in the second line in 2024, but also J&J’s anti-BCMA T-cell engager Tecvayli, which faces an imminent FDA decision based on its second-line Majestec-3 study.

Until now Arcellx had only disclosed that anito-cel was filed and that it was expecting an FDA decision in the second half of this year. On Monday it revealed that the PDUFA date was 23 December, meaning no priority review for the BLA and implying that – for now at least – the FDA doesn’t see anything special enough about anito-cel to warrant fast-tracking it.

The initial BLA, in fourth-line or later multiple myeloma, is based mostly on the Immagine-1 study, which showed a 97% ORR, 68% complete response rate, and a lack of the delayed neurotoxicities, including Parkinsonism, with which Carvykti has been linked – a fact Arcellx has taken every available opportunity to remind investors of.

Three-year courtship

The takeover comes as the culmination of a three-year collaboration, Gilead first licensing anito-cel from Arcellx in December 2022 in a deal worth $225m up front plus $100m in equity.

That was followed 11 months later with $85m in cash plus another $200m equity investment as Gilead locked in rights specifically to the technology behind anito-cel’s artificial BCMA-binding domain. As a result of these deals Gilead was already an 11.5% Arcellx holder before Monday’s takeover.

Investors will note that, under the tenure of Dan O’Day as chief executive, Gilead has a rather questionable track record in oncology transactions. The $21bn it stumped up for Immunomedics is seen as a major overpayment; over $1bn has gone to Arcus in several deals covering TIGIT blockade, even as it became increasingly obvious that that approach was a non-starter.

Arcellx bulls will celebrate that fact that earlier misjudgements haven’t entirely put O’Day off deal-making, even though he is perhaps being more cautious now than in the past.

Billion-dollar oncology takeovers since 2025

Source: OncologyPipeline.