08:34 AM EDT, 03/28/2024 (MT Newswires) -- Gilead Sciences ( GILD ) and Xilio Therapeutics ( XLO ) said Thursday they have entered an exclusive license agreement for Gilead to develop and commercialize Xilio's phase 1 tumor-activated IL-12 molecule dubbed XTX301.

Under the terms of the deal, Gilead will pay Xilio $43.5 million upfront, which includes $30 million in cash and an initial $13.5 equity investment in Xilio common stock, the companies said. The deal also includes potential additional payments of up to $604 million based on development, regulatory, and sales milestones, they added.

Xilio is also slated to receive royalties on global net product sales, the companies said. Xilio will conduct initial development in the ongoing phase 1 trial, while Gilead can take over development and commercialization after specified clinical data delivery, paying a $75 million transition fee, they added. Xilio would be eligible for up to $29 million in additional equity investments and a development milestone payment.

The companies said XTX301 is expected to support anti-tumor immunity and modify the tumor microenvironment in patients with poorly immunogenic solid tumors.

Gilead expects the deal to lower its 2024 GAAP and non-GAAP earnings by about $0.03 to $0.04 per share.

Price: 73.2, Change: +0.19, Percent Change: +0.26