Gilead and Merus Announce Collaboration to Discover Novel Antibody-Based Trispecific T-Cell Engagers
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Insights
The collaboration between Gilead Sciences and Merus N.V. represents a strategic investment in the development of innovative oncology therapies, particularly trispecific antibodies. The financial implications of this agreement are multifaceted. Firstly, the upfront payment of $56 million and the $25 million equity investment by Gilead into Merus common shares underscore the value Gilead sees in Merus' Triclonics® platform. Such investments are indicative of Gilead's commitment to expanding its oncology pipeline and could signal confidence in the potential market value of the therapies developed.
Moreover, the agreement's structure, with potential payouts to Merus reaching up to $1.5 billion, including milestones and royalties, reflects the high stakes and rewards associated with drug development in the biotechnology sector. This could be attractive to investors seeking high-growth opportunities. However, the anticipated impact on Gilead’s GAAP and non-GAAP 2024 EPS, a decrease of approximately $0.03 - $0.05, may raise concerns among shareholders about near-term earnings dilution. It's essential to recognize that such investments often have a long-term horizon before yielding returns and the immediate EPS impact might be outweighed by the future potential of the therapies.
The significance of trispecific antibodies in cancer treatment is rooted in their ability to bind to three different targets simultaneously, which could enhance the immune system's ability to fight cancer cells more effectively than current treatments. The collaboration leverages Merus’ proprietary Triclonics® platform, which is at the forefront of antibody engineering. This approach could potentially lead to therapies with improved efficacy and safety profiles over existing treatments.
From a research perspective, the early-stage research activities led by Merus and the option for Gilead to license developed programs reflect a cautious yet optimistic approach to R&D investment. The terms of the agreement, which allow for Merus to opt-in for a 50/50 split of net profits and losses for the third potential program, suggest a balanced risk-sharing model that could incentivize both parties to maximize the success of the collaboration.
The focus on dual tumor-associated antigens (TAA) targeting is particularly relevant, as TAAs are proteins often overexpressed in cancer cells, making them ideal targets for immunotherapy. The success of such therapies could significantly impact the standard of care in oncology and address unmet medical needs, which in turn could lead to substantial market opportunities.
Entering the trispecific therapeutic space, Gilead Sciences is positioning itself within a cutting-edge niche of the oncology market. The strategic collaboration with Merus could potentially disrupt the current market dynamics by introducing a novel class of cancer therapeutics. The market's response to this news will likely be influenced by the perceived potential of trispecific antibodies to change treatment paradigms and by Gilead's history of successful drug development and commercialization.
Investors and market analysts will be monitoring the progression of these preclinical research programs closely, as the success of these therapies could open up new revenue streams for Gilead. It is also important to consider the competitive landscape; if Gilead and Merus are able to bring a successful product to market, it could challenge existing therapies and alter market shares within the oncology sector. Additionally, the tiered royalty structure suggests that Gilead anticipates a range of outcomes regarding the commercial success of these therapies, which is a common approach to manage financial risk in biotech collaborations.
– Gilead Receives Exclusive Option to License Novel Trispecific Therapeutics Resulting from the Collaboration –
Merus is a clinical-stage oncology company developing innovative, full-length, multispecific antibodies (Biclonics® and Triclonics®), referred to together as Multiclonics®, that are generated by a proprietary common light chain technology. The Triclonics® or trispecific platform provides the unique opportunity to design antibodies capable of simultaneously binding to three targets at once.
"We have seen the successful application of bispecific antibodies as an immune-modulating modality used to treat cancer. We are now looking ahead to the development of additional multispecific antibodies capable of driving robust anti-tumor immune responses with an improved efficacy and safety profile," said Flavius Martin, M.D., Executive Vice President, Research, Gilead Sciences. "We are excited to explore the potential of Merus’ differentiated Triclonics® platform to discover and advance transformative new cancer therapies as we deepen our portfolio across oncology indications."
"We are looking forward to working with Gilead to develop novel T-cell engager antibodies using our Triclonics® technology," said Hui Liu, Ph.D., Executive Vice President, Chief Business Officer & Head of Merus US. "We are grateful for our collaborations which represent opportunities for Merus to leverage our research capabilities to pursue innovative biology and to address significant unmet medical needs. Importantly, this collaboration represents the first for our proprietary Triclonics® platform."
Terms of the Agreement
Under the terms of the agreement, Merus will lead early-stage research activities for two programs, with an option to pursue a third. Gilead will have the right to license programs developed under the collaboration after the completion of select research activities. If Gilead exercises its option to license any such program from the collaboration, Gilead will be responsible for additional research, development and commercialization activities for such program. Merus will receive an upfront cash payment of
Gilead does not exclude acquired IPR&D expenses from its non-GAAP financial measures. This transaction with Merus is expected to reduce Gilead’s GAAP and non-GAAP 2024 EPS by approximately
About Merus
Merus is a clinical-stage oncology company developing innovative full-length human bispecific and trispecific antibody therapeutics, referred to as Multiclonics®. Multiclonics® are manufactured using industry standard processes and have been observed in preclinical and clinical studies to have several of the same features of conventional human monoclonal antibodies, such as long half-life and low immunogenicity. For additional information, please visit Merus’ website, X and LinkedIn.
About Gilead Sciences
Gilead Sciences, Inc. is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people. The company is committed to advancing innovative medicines to prevent and treat life-threatening diseases, including HIV, viral hepatitis, COVID-19, and cancer. Gilead operates in more than 35 countries worldwide, with headquarters in
Merus Forward-Looking Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation, benefits of a collaboration between Gilead Sciences, Inc. and Merus; whether and when Merus will receive any future payment under the collaboration, including milestones or royalties, and the amounts of such payments; whether any programs under the collaboration will be successful; the potential of Merus’ Triclonics® platform to leverage our research capabilities to pursue innovative biology and to address significant unmet medical needs, and to provide the unique opportunity to design antibodies capable of simultaneously binding to three targets at once. Importantly, this collaboration represents the first for our proprietary Triclonics® platform. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: our need for additional funding, which may not be available and which may require us to restrict our operations or require us to relinquish rights to our technologies or antibody candidates; potential delays in regulatory approval, which would impact our ability to commercialize our product candidates and affect our ability to generate revenue; the lengthy and expensive process of clinical drug development, which has an uncertain outcome; the unpredictable nature of our early stage development efforts for marketable drugs; potential delays in enrollment of patients, which could affect the receipt of necessary regulatory approvals; our reliance on third parties to conduct our clinical trials and the potential for those third parties to not perform satisfactorily; impacts of the COVID-19 pandemic; we may not identify suitable Biclonics®, Triclonics® or multispecific antibody candidates under our collaborations or our collaborators may fail to perform adequately under our collaborations; our reliance on third parties to manufacture our product candidates, which may delay, prevent or impair our development and commercialization efforts; protection of our proprietary technology; our patents may be found invalid, unenforceable, circumvented by competitors and our patent applications may be found not to comply with the rules and regulations of patentability; we may fail to prevail in potential lawsuits for infringement of third-party intellectual property; our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks.
These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the period ended December 31, 2023, filed with the Securities and Exchange Commission, or SEC, on February 28, 2024, and our other reports filed with the SEC, could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change, except as required under applicable law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
Multiclonics®, Biclonics® and Triclonics® are registered trademarks of Merus N.V.
Gilead Forward-Looking Statement
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors, including Gilead’s ability to realize the anticipated benefits from the collaborations; difficulties or unanticipated expenses in connection with the collaborations and the potential effects on Gilead’s earnings; the risk that Gilead’s investment in Merus will lose value for any number of reasons; the ability of the parties to initiate, progress or complete clinical trials within currently anticipated timelines or at all, and the possibility of unfavorable results from ongoing or additional trials, including those developed pursuant to the collaborations; the ability of the parties to file applications for regulatory approval or receive regulatory approvals in a timely manner or at all for the investigational therapeutics developed pursuant to the collaborations, and the risk that any such approvals may be subject to significant limitations on use; the possibility that the parties may make a strategic decision to discontinue development of any of the investigational therapeutics developed pursuant to the collaborations, and therefore these therapeutics may never be successfully commercialized; and any assumptions underlying any of the foregoing. These and other risks, uncertainties and other factors are described in detail in Gilead’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the
Gilead and the Gilead logo are trademarks of Gilead Sciences, Inc., or its related companies. The Merus name and logo are trademarks of Merus.
For more information about Gilead, please visit the company’s website at www.gilead.com, follow Gilead on X/Twitter (@Gilead Sciences) and LinkedIn (@Gilead-Sciences).
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Merus Info
Sherri Spear
VP Investor Relations and Corporate Communications
617-821-3246
s.spear@merus.nl
Kathleen Farren
Investor Relations and Corporate Communications
617-230-4165
Gilead Info
Meaghan Smith, Media
public_affairs@gilead.com
Jacquie Ross, Investors
investor_relations@gilead.com
Source: Gilead Sciences, Inc.
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