Santa Monica-based cell therapy pharma company Kite has agreed to purchase a stake in the lead cancer drug candidate of Redwood City-based pharma company Arcellx Inc.
Kite will pay $225 million in cash and $100 million in equity investment, plus potential contingency payments upon approval and commercialization milestones for the drug, which uses cell therapy to treat patients with multiple myeloma, a blood cancer.
Under the terms of the deal, which was announced in early December, the two companies will share development, clinical trials, and commercialization costs for the drug. They will also split U.S. profits 50/50. After completion of the technical transfer, Kite will be responsible for manufacturing the drug. Outside the U.S., Kite will commercialize the product and Arcellx will receive royalties on sales.
The transaction is expected to close in the first quarter of 2023, “The collaboration with Arcellx enables Kite to expand into a new area of high unmet need and bring a potentially best-in-class cell therapy to help many patients,” Christi Shaw, Kite’s chief executive, said in the announcement. “Cell therapy has proven it can change the way cancer is treated by creating a potentially curative therapy for an individual patient, engineered from their own t-cells.”
Charlotte, N.C.-based Bank of America is acting as financial advisor to Kite in the deal. Kite is a subsidiary of Foster City-based Gilead Sciences Inc.
Multiple myeloma is a blood cancer that causes bone lesions, loss of bone density and bone fractures; in most patients, it is not curable. Because it often strikes elderly patients, multiple myeloma often combines with other co-morbidities to create conditions that can quickly escalate and become life-endangering.
Acrellx’s drug, which uses the body’s T cells that have been genetically modified to target multiple myeloma, is currently in phase two clinical development. It had previously earned fast-track and regenerative medicine advanced therapy designations from the U.S. Food and Drug Administration.
