Shares of Arcus Biosciences (RCUS) - Get Report on Wednesday tumbled after the biopharma signed a 10-year partnership with Gilead Sciences (GILD) - Get Report to develop and commercialize Arcus's investigational immuno-oncology therapies.
Shares of Arcus, the Hayward, Calif., cancer-therapy-research company, at last check were sliding 11% to $29.68.
Under the agreement, Arcus will receive $375 million upon closing, consisting of a $175 million upfront payment and a $200 million equity investment from Gilead.
Arcus is eligible to receive as much as $1.23 billion in opt-in and milestone payments with respect to its current clinical product candidates.
The deal is expected to close in the third quarter.
Gilead will have access to Arcus’s current and future investigational immunooncology products through the agreement.
Gilead will receive the right to opt in to all other programs that emerge from Arcus’s research portfolio over the next 10 years, upon payment of an opt-in fee of $150 million per program after Arcus’s delivery of a qualifying data package.
When the deal closes, Gilead will have the right to appoint two individuals to Arcus’s board.
Gilead "is an ideal partner for Arcus with its focus on thoughtful and purposeful science, vision to provide transformational therapies in the oncology setting and deeply experienced scientific leadership,” Arcus Chief ExecutiveTerry Rosen said in a statement.
Last month Arcus shares soared after Bloomberg reported that Gilead was considering taking a stake in the company.
Earlier this month, the FDA cleared for emergency use remdesivir, Gilead's antiviral drug intended to treat hospitalized coronavirus patients.
Gilead Sciences was off 0.8% to $72.60.