Arcellx Inc (NASDAQ:ACLX) shares jumped 8% to $51.28 in early Wednesday trading after the clinical-stage biotechnology company announced that it has received a $200 million equity investment from Gilead Sciences Inc’s Kite as part of an expanded collaboration.
Gilead will buy 3.24 million shares of Arcellx at a price of $61.68 per share, representing a 30% premium to Tuesday’s closing price.
The investment will give Gilead a 13% stake in Arcellx, which is expected to extend the company’s cash runway into 2027.
Arcellx will also receive an upfront non-dilutive cash payment of $85 million at closing and will be eligible for potential milestone payments, including the advancement of lymphoma and the license for ARC-SparX, as well as additional milestones, to offset prespecified development costs over a limited period of time.
In addition, Kite has exercised its option to negotiate a license for Arcellx’s ARC-SparX program, ACLX-001, in multiple myeloma treatment.
As well, the companies have expanded the scope of the collaboration for Arcellx’s CART-ddBCMA to include lymphomas.
Shares of Arcellx have gained 62% year to date.
Contact Sean at sean@proactiveinvestors.com