Gilead bets on Xilio cancer drug as biotech restructures
28 Mar 2024
License out/inPhase 1ImmunotherapyPROTACs
Dive Brief:
Gilead Sciences will pay $30 million and invest another $13.5 million in Xilio Therapeutics to access an experimental immunotherapy drug the Massachusetts biotechnology company is developing for cancer.
The deal will give Gilead an exclusive license to the drug, called XTX301 and currently in a Phase 1 clinical trial of people with solid tumors. Xilio could receive as much as $604 million in additional payments and equity investment if certain milestones are met.
Alongside the Gilead agreement, Xilio announced a private placement equity financing Thursday that will give it another $11.3 million in funding for its cancer drug development work. The company will focus on XTX301 and another molecule called XTX101, while discontinuing further investment in a third drug as a monotherapy. Xilio is also laying off 15 employees, or about 21% of its workforce, in the restructuring.
Dive Insight:
XTX301 is a form of the cytokine IL-12 that’s designed to be activated only within the local area surrounding a tumor. IL-12 drugs have been explored for years as a possible cancer immunotherapy, but their track record is mixed. Bristol Myers, for example, paid Dragonfly Therapeutics $475 million in 2020 to license an IL-12 medicine, only to terminate the license and return rights back to Dragonfly three years later. Eli Lilly, AstraZeneca and Merck & Co. have also done IL-12 research.
With XTX301, Gilead is intrigued enough that it is paying nearly three times Xilio’s market value prior to the deal’s announcement. Gilead is in the midst of a second wave of cancer dealmaking, after a series of transactions from several years ago — including the $21 billion purchase of Immunomedics and the $5 billion acquisition of Forty Seven — didn't pan out as well as the company had hoped.
Shares in Xilio rose by nearly 150% Thursday morning on news of the licensing agreement.
“Xilio’s novel tumor-activation platform naturally complements Gilead’s clinical development program in difficult-to-treat cancers and expands our focus in immuno-oncology,” said Bill Grossman, Gilead’s head of oncology clinical development, in a statement. The company sees potential for XTX301 both as a monotherapy and in combination, Grossman said.
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