Gilead buys autoimmune disease biotech Ouro for $2.2bn

Gilead Sciences has built up its position in the hot area of T-cell engagers (TCEs) for autoimmune diseases with an agreement to buy Ouro Medicines for up to $2.2 billion.

The front-loaded deal, which includes an upfront cash payment of nearly $1.7 billion and $500 million in potential achievement-related payments, comes just over a year after Ouro emerged onto the scene with $120 million in first-round funding and a plan to develop bispecific antibody-based TCE therapies for autoimmune diseases.

It is also Gilead's second M&A transaction in the space of a month, coming after it announced a $7.8 billion takeover of its cell therapy partner Arcellx, taking full control of anito-cel, a BCMA-targeted CAR-T therapy for blood cancer multiple myeloma, which is already filed for FDA approval.

There could also be a role to play for Gilead's longstanding but troubled Belgian partner, Galapagos, which may take on some of the R&D for programmes acquired through the Ouro deal, and absorb the operating assets and workforce of the San Francisco-based company, which was founded by GSK and Monograph Capital.

Those programmes include one clinical-stage drug candidate – a CD3 and BCMA-directed bispecific TCE licensed from China's Keymed Biosciences called gamgertamig (also known as OM336) – and a pipeline of drugs for chronic immune-mediated diseases.

Keymed is developing OM366 in phase 2 trials as a potential treatment for blood cancer multiple myeloma in China, while Ouro has started a phase 1/2 study exploring its potential in autoimmune indications, including autoimmune haemolytic anaemia (AIHA) and immune thrombocytopenia (ITP), for which it has both orphan drug and fast-track designations from the FDA.

Ouro has previously suggested that gamgertamig is a 'pipeline-in-a-product', as it could have a broad range of potential indications, including systemic lupus erythematosus, scleroderma, rheumatoid arthritis, Sjögren's, and myositis, which are driven by BCMA-expressing B-cells that can be depleted using the bispecific antibody.

"BCMA targeted T cell engagers represent a differentiated approach with the potential to induce durable disease control," said Gilead's chief medical officer Dietmar Berger. "This novel framework complements our expanding inflammation pipeline and reflects our strategy to invest in innovative science that may redefine standards of care."

For the US drugmaker, buying Ouro continues a process in which the company is diversifying beyond its core HIV and oncology franchises, with immunology & inflammation as well as liver diseases the key target areas to build that broader focus.

The company has navigated a patent cliff that kicked in at the end of the last decade and is now back to solid growth, with no major patent losses expected until into the 2030s, emboldening it to turn to M&A to build its medium- to long-term growth prospects.

Galapagos' involvement being negotiated

Meanwhile, the collaboration with Galapagos – currently in "advanced discussions" – could see the company pay half the upfront fee and half of any milestone payments that become due. It would be responsible for the costs of developing gamgertamig, but would get a 20% to 23% royalty rate on sales if it reaches the market.

In addition, the strategic alliance between Gilead and Galapagos – which was started in 2019 but suffered development setbacks and has been substantially reduced in scope – would be renegotiated to free up $500 million of the Belgian biotech's cash to be used for its own purposes.

Last year, Galapagos announced a plan to split into two companies – one focused on drugs and the other on cell therapies that would be sold off – but abandoned the idea after failing to find a buyer.

Under new CEO Henry Gosebruch, the company has been looking for partnering and acquisition opportunities in oncology, immunology, and infectious diseases, and the Ouro deal could fulfil part of that objective while providing capital for other deals.