$5 billion poured into the ADC sector, Gilead Sciences (GILD.US) acquires German Tubulis at a high price

Zhitong Finance APP learned that Gilead Sciences (GILD.US) agreed to acquire Germany’s private biotechnology company Tubulis GmbH for a total transaction value of up to $5 billion. The move is intended to strengthen its portfolio in the field of popular and emerging oncology drug development.

In a statement Tuesday, the two companies said that Gilead will pay a $3.15 billion cash upfront payment, and will also pay an additional $1.85 billion upon reaching certain milestones. The transaction is expected to be completed in the second quarter.

Tubulis is a key competitor in the new drugs arena, a technology that involves directly delivering compounds that can kill cancer cells effectively into tumors. These drugs, known as antibody-drug conjugates (ADCs), have the potential to improve existing therapies. The sector has also sparked a wave of pharma industry mergers and acquisitions, including Pfizer’s $43 billion acquisition of Seagen Inc. in 2023.

In the statement, Gilead CEO Daniel O’Day said the deal “is an important milestone in Gilead’s progress in oncology.” He noted that it will give the company access to a potential new ovarian cancer drug, as well as a broader platform for producing next-generation ADC drugs.

Gilead currently sells an ADC drug for breast cancer called Trodelvy. Tubulis is conducting clinical trials for drugs against ovarian cancer, lung cancer, and other types of tumors. The company has a partnership with Bristol-Myers Squibb Co., and it has already collaborated with Gilead on one of the drugs.

Data show that the ovarian cancer market could reach $5.6 billion by 2030, and Tubulis has the potential to challenge industry giants such as AstraZeneca and Eli Lilly.

The two companies said that after the deal closes, Tubulis will become an internal dedicated ADC research division at Gilead, and its Munich-based base will serve as the center for this research effort.

This is Gilead’s third major deal so far this year. In March, Gilead announced it would acquire Ouro Medicines for up to $2.18 billion. Ouro Medicines is a private company that tests antibody drugs targeting autoimmune diseases. In February, the company announced plans to acquire Arcellx Inc., a cancer-focused biotechnology company, for up to $7.8 billion, to bolster its R&D pipeline.