© Reuters. FILE PHOTO: The logo of the pharmaceutical company Gilead Science Inc is seen in Oceanside, California, U.S., April 29, 2020. REUTERS/Mike Blake
(Reuters) – Gilead Science (NASDAQ:) will buy all remaining rights to an experimental cancer therapy, GS-1811, from Jounce Therapeutics (NASDAQ:) for $67 million, the drugmaker. said on Tuesday.
The revised license agreement will strengthen Jounce’s cash flow in a challenging market for biotech companies.
Shares of Jounce more than doubled to $1.68, while shares of Gilead fell slightly after trading in the market.
Gilead will now be solely responsible for all development and commercialization of the GS-1811 globally. The revised agreement is expected to reduce its 2022 earnings per share by 4 cents on both a GAAP and non-GAAP basis.
GS-1811 is currently being evaluated in an early-stage trial for patients with solid tumors and works by selectively depleting T cells that suppress the body’s immune response and allow tumors develop.
In 2020, the drugmakers agreed to co-develop the GS-1811, when Gilead made an upfront payment of $85 million for Jounce. Under initial terms, Jounce is eligible to receive a substantial payment of up to $685 million from Gilead, of which it has received $40 million to date.
With the amendment, Jounce will no longer receive residual milestone payments or any royalties based on sales for this therapy.