-- Arcellx to receive $200M equity investment at $61.68 per share and an $85 million upfront cash payment --
-- Kite exercises option to Arcellx's ARC-SparX
program ACLX-001 in multiple myeloma --
-- The companies expand the scope of their
existing collaboration for CART-ddBCMA to include lymphomas --
REDWOOD
CITY, Calif. and SANTA MONICA,
Calif., Nov. 15, 2023 /PRNewswire/ -- Arcellx,
Inc. (NASDAQ: ACLX) and Kite, a Gilead Company (NASDAQ: GILD),
today announced that the companies have expanded their existing
collaboration, which was originally announced in December 2022.
Kite has exercised its option to negotiate a license for
Arcellx's ARC-SparX program, ACLX-001, in multiple myeloma, which
is comprised of ARC-T cells and SparX proteins that target BCMA.
The companies have also expanded the scope of the collaboration for
Arcellx's CART-ddBCMA to include lymphomas.
"Since entering into this strategic collaboration with Kite
almost one year ago, we are thrilled with how the partnership is
rapidly progressing and the alignment across our teams," said
Rami Elghandour, Arcellx's Chairman
and Chief Executive Officer. "Helping as many cancer patients as
possible serves as the core of our collaboration. With the deep and
durable responses demonstrated in our CART-ddBCMA Phase 1 trial in
multiple myeloma, we believe that our novel synthetic binder, the
D-Domain, underscores the potential to engineer a new class of CAR
T therapies. We are excited to deepen our relationship with Kite as
they continue to invest in our platform by exercising their rights
to our ACLX-001 ARC-SparX program in multiple myeloma and
increasing their investment in our company. With this additional
investment from Kite, our strengthened cash position is anticipated
to extend our runway into 2027, as we advance towards
commercializing CART-ddBCMA. Additionally, as our partnership
deepens, we continue to identify operational efficiencies and
additional opportunities to collaborate which are also reflected in
this agreement. Importantly, these efficiencies embody the trust
developed with our Kite partners and do not alter the original
agreement in principle or economics. We look forward to sharing
data from our CART-ddBCMA Phase 1 trial at ASH in December."
"We are pleased to see the momentum with the CART-ddBCMA
multiple myeloma program, enabling Kite to enter an area of high
unmet need and bring a new, potentially best-in-class cell therapy
to patients," said Cindy Perettie,
Executive Vice President of Kite. "Given this, we are deepening our
relationship with Arcellx to further support advancement of
CART-ddBCMA, bolster our pipeline in multiple myeloma, as well as
access opportunities in lymphoma. In expanding our strategic
partnership with Arcellx, we are building upon the established
synergy between Arcellx's platform technologies and Kite's
industry-leading position in CAR T manufacturing and
commercialization."
Upon closing, Arcellx will receive a $200
million equity investment to purchase 3,242,542 shares of
its common stock, which is expected to extend the company's cash
runway into 2027. Following this investment, Gilead's estimated
ownership will be 13%. Arcellx will also receive an upfront
non-dilutive cash payment of $85
million at closing and will be eligible for potential
milestone payments, including the advancement of lymphoma and the
license for ARC-SparX, as well as additional milestones, to offset
prespecified development costs over a limited period of time. The
transaction is expected to close around year-end 2023. Closing of
the transaction is subject to expiration or termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvement
Act and other customary conditions.
Beginning in the first quarter of 2022, consistent with recent
industry communications from the U.S. Securities and Exchange
Commission (SEC), Gilead no longer excludes acquired IPR&D
expenses from its non-GAAP financial measures. Assuming the
transaction closes by year-end 2023, we expect the transaction to
reduce Gilead's GAAP and non-GAAP 2023 EPS by approximately
$0.09-$0.11 per share.
Wilson Sonsini Goodrich &
Rosati is serving as legal counsel to Arcellx.
About Arcellx and Kite Collaboration
Arcellx and Kite,
a Gilead Company, formed a global strategic collaboration to
co-develop and co-commercialize Arcellx's CART-ddBCMA candidate for
the treatment of patients with relapsed or refractory multiple
myeloma currently in a pivotal Phase 2 study. Kite and Arcellx will
jointly advance and commercialize the CART-ddBCMA asset in
the United States, and Kite will
commercialize the product outside the U.S.
About CART-ddBCMA
CART-ddBCMA uses D-Domain (DD),
which is designed to improve target specificity while enhancing
binding affinity, in lieu of a scFv antigen recognition motif. DD
is a small, stable, fully synthetic binding agent with a
hydrophobic core, and can potentially enable higher transduction
efficiency, high cell surface expression, and low tonic signaling.
The D-Domain binder optimizes CAR T cell binding and killing
of multiple myeloma cells.
About Kite
Kite, a Gilead Company, is a global
biopharmaceutical company based in Santa
Monica, California, focused on cell therapy to treat and
potentially cure cancer. As the global cell therapy leader, Kite
has treated more patients with CAR T-cell therapy than any other
company. Kite has the largest in-house cell therapy manufacturing
network in the world, spanning process development, vector
manufacturing, clinical trial production, and commercial product
manufacturing.
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 and
cancer. Gilead operates in more than 35 countries worldwide, with
headquarters in Foster City,
California. Gilead acquired Kite in 2017.
About Arcellx, Inc.
Arcellx, Inc. is a clinical-stage biotechnology company reimagining
cell therapy by engineering innovative immunotherapies for patients
with cancer and other incurable diseases. Arcellx believes that
cell therapies are one of the forward pillars of medicine and
Arcellx's mission is to advance humanity by developing cell
therapies that are safer, more effective, and more broadly
accessible. Arcellx's lead product candidate, CART-ddBCMA, is being
developed for the treatment of relapsed or refractory multiple
myeloma (rrMM) in a Phase 2 pivotal trial. CART-ddBCMA has been
granted Fast Track, Orphan Drug, and Regenerative Medicine Advanced
Therapy designations by the U.S. Food and Drug
Administration.
Arcellx is also developing its dosable and controllable CAR T
therapy, ARC-SparX, through two Phase 1 programs, ACLX-001 for rrMM
and ACLX-002 in relapsed or refractory acute myeloid leukemia and
high-risk myelodysplastic syndrome. For more information on
Arcellx, please visit www.arcellx.com. Follow Arcellx on
X (formerly known as Twitter) (@arcellx) and LinkedIn.
Arcellx Forward-looking Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements in this press release that are not purely historical
are forward-looking statements, including, without limitation:
anticipated completion of the proposed transaction, including the
closing of a proposed concurrent equity investment; potential
payments that may be received by Arcellx in connection with the
collaboration, including potential milestones and royalties; and
Arcellx's and Kite's respective rights and obligations under the
Collaboration Agreement, as amended; Arcellx's cash position
following the closing of the transaction and anticipated cash
runway; Arcellx's plans for the clinical development of its product
candidates, including anticipated announcements of additional data;
Arcellx and Kite's plans to advance and commercialize CART-ddBCMA;
and the potential impact of Arcellx's product candidates and
platforms on patients and cell therapy. The forward-looking
statements contained herein are based upon Arcellx's current
expectations and involve assumptions that may never materialize or
may prove to be incorrect. These forward-looking statements are
neither promises nor guarantees and are subject to a variety of
risks and uncertainties, including, without limitation: that the
proposed transaction will be completed in a timely manner or at
all, the possibility that certain closing conditions to the
proposed transaction will not be satisfied; uncertainty as to
whether the anticipated benefits and opportunities of the proposed
collaboration may not be realized or make take longer to realize or
may cost more than expected; risks of unexpected hurdles, costs or
delays; challenges in technology transfer and cell therapy
manufacturing, particularly scaling up to commercial supply
volumes, which could limit the benefits of the collaboration;
challenges inherent in new product candidate development, including
the uncertainty of clinical success and obtaining regulatory
approvals; challenges associated with collaborating with third
parties, including intellectual property, operational, financial
and other risks; uncertainty of commercial success for new
products; the ability of Arcellx and Kite to successfully execute
their strategic plans; and risks that may be found in the section
entitled Part II, Item 1A (Risk Factors) in the Quarterly Report on
Form 10-Q for the quarter ended September
30, 2023, filed with the Securities and Exchange Commission
(SEC) on November 13, 2023, and the
other documents that Arcellx may file from time to time with the
SEC. These forward-looking statements are made as of the date of
this press release, and Arcellx assumes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
Gilead Forward-looking
Statements
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 the ability of the parties to complete the
transaction in a timely manner or at all; the possibility that
various closing conditions for the transaction may not be satisfied
or waived, including the possibility that a governmental entity may
prohibit, delay or refuse to grant approval for the consummation of
the transaction; difficulties or unanticipated expenses in
connection with the collaboration, including with respect to the
development of ARC-SparX, CART-ddBCMA or other programs subject of
the collaboration; 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 clinical studies, including those involving
ARC-SparX, CART-ddBCMA or other programs subject of the
collaboration; uncertainties relating to regulatory applications
and related filing and approval timelines for ARC-SparX,
CART-ddBCMA or other programs subject of the collaboration,
including the risk that FDA may not approve any such programs on
the currently anticipated timelines or at all, and any marketing
approvals, if granted, may have significant limitations on its use;
the possibility that the parties may make a strategic decision to
terminate this collaboration or make a strategic decision to
discontinue development of the programs subject of the
collaboration at any time, and as a result, such programs may never
be commercialized; the risk that Gilead and Kite may not realize
the anticipated benefits of the collaboration with Arcellx; the
risk that Gilead's investment in Arcellx will lose value for any
number of reasons; the potential effect of any of the foregoing on
Gilead and Kite's earnings; and any assumptions underlying any of
the foregoing. These and other risks, uncertainties and other
factors are described in detail in Gilead's Quarterly Report on
Form 10-Q for the quarter ended September
30, 2023, as filed with the U.S. Securities and Exchange
Commission. These risks, uncertainties and other factors could
cause actual results to differ materially from those referred to in
the forward-looking statements. All statements other than
statements of historical fact are statements that could be deemed
forward-looking statements. The reader is cautioned that any such
forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, and is cautioned not to place
undue reliance on these forward-looking statements. All
forward-looking statements are based on information currently
available to Gilead and Kite, and Gilead and Kite assume no
obligation and disclaim any intent to update any such
forward-looking statements.
Kite, the Kite logo and GILEAD are trademarks
of Gilead Sciences, Inc. or its related companies.
For more information on Kite, please visit the
company's website at www.kitepharma.com.
Follow Kite on social media on X (@KitePharma) and
LinkedIn.
Arcellx Contacts:
Investors:
Myesha
Lacy
ir@arcellx.com
510-418-2412
Media:
Andrea Cohen
Sam Brown Inc.
andreacohen@sambrown.com
917-209-7163
Gilead/Kite Contacts:
Investors:
Jacquie Ross
investor_relations@gilead.com
Media:
Tracy Rossin
trossin@kitepharma.com
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SOURCE Arcellx, Inc.