Gilead Sciences Inc. ( GILD ) shares were up briefly on Tuesday as the company is expanding its inflammation portfolio through a strategic acquisition.

Gilead on Monday agreed to acquire Ouro Medicines for $1.675 billion in upfront cash, with additional contingent milestone payments of up to $500 million.

Strategic Acquisition Strengthens Inflammation Pipeline

The acquisition adds a clinical-stage bispecific BCMAxCD3 T cell engager, OM336, to Gilead's portfolio.

The drug is designed to treat severe autoimmune diseases and has shown promising efficacy in clinical studies.

The deal is part of Gilead's strategy to enhance its offerings in the autoimmune disease space, particularly with therapies that target B cells and plasma cells.

OM336 has received Fast Track and Orphan Drug Designation from the U.S. Food and Drug Administration (FDA), indicating its potential significance in treating conditions like autoimmune hemolytic anemia and immune thrombocytopenia.

Galapagos Collaboration Structure And Cost Sharing

Gilead is in advanced talks with Galapagos NV ( GLPG ) to form an R&D collaboration tied to the acquired Ouro Medicines assets.

Galapagos would fund 50% of the upfront payment and 50% of any milestone obligations owed to Ouro shareholders, and would take on most of Ouro's operating assets and employees.

The companies would co-develop OM336, with Galapagos covering development costs through the start of registrational studies; later-stage study costs would be split 50/50.

Commercialization Rights And Financial Flexibility

Gilead would retain global commercialization rights (excluding Greater China, where Keymed Biosciences holds rights) and pay Galapagos 20%–23% royalties on net sales.

The amended OLCA would allow Galapagos to deploy up to $500 million of its cash more flexibly, including up to $150 million for share buybacks.

In January, Gilead agreed to acquire Arcellx Inc. ( ACLX ) to enhance its long-term oncology prospects for $115 per share in cash, along with a contingent value right of $5 per share, totaling an implied equity value of $7.8 billion.

GILD Price Action: Gilead Sciences ( GILD ) shares were down 0.50% at $136.65 at the time of publication on Tuesday, according to Benzinga Pro data.

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