Gilead pens $1.5B buyout option deal for Pionyr

Gilead
(Gilead)(Gilead China)

As it continues with its small to medium-sized biotech deals, Gilead Sciences has put down $275 million for a 49.9% share in immuno-oncology biotech Pionyr Immunotherapeutics with the option to buy it out completely should it pass muster in early clinical tests.

This buyout would cost another $315 million, with around $1 billion in backloaded biobucks also on the cards.

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For its cash, Gilead can tap Pionyr's tech, known as myeloid tuning, which is designed to rebalance the tumor microenvironment to favor immune-activating myeloid cells over immune-suppressing myeloid cells. This activity is believed to enhance anti-tumor efficacy, particularly in combination with checkpoint inhibition.

This tech can in essence help predict checkpoint inhibitor responsiveness, with two of its staffers having already worked on two such drugs: Yervoy and Keytruda. One is Max Krummel, Ph.D., University of California, San Francisco professor and Pionyr co-founder, who has been a pioneer in immuno-oncology since the mid-1990s and was one of the inventors behind Bristol Myers Squibb’s first checkpoint inhibitor Yervoy.

Pionyr currently has two leading, yet still preclinical assets: PY314 and PY159, both of which are first-in-class antibodies designed to remove or reprogram, respectively, the immunosuppressive cells in the tumor microenvironment and thereby enhance anti-tumor immunity.

Two INDs with the FDA are planned for filing in the third quarter, and, if early testing goes well, Gilead can then (or sooner if it chooses) decide to buy the company out completely. A nice de-risking strategy for a fairy low price, but the stakes are still high given the very early nature of the science.

Gilead, though, is optimistic. “Pionyr is pursuing promising, novel biology in the field of immuno-oncology,” said Daniel O’Day, chairman and CEO of Gilead.

“The agreement represents important progress as we continue to build out Gilead's presence in immuno-oncology with innovative and complementary approaches. We look forward to seeing the programs advance with the goal of developing new therapies that will improve the treatment of cancer.”

This comes a few years after its $12.9 billion buyout of Kite Pharma and its cell therapy work as well as, more recently, smaller deals including its $5 billion buyout of Forty Seven as well as a $2 billion biobucks pact with Arcus Bioscence. These biotechs are deepening Gilead’s cancer pipeline hopes.

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