FX.co ★ Gilead, Xilio Announce Exclusive License Agreement For Tumor-Activated IL-12 Program XTX301

Pharmaceutical companies Gilead Sciences, Inc. and Xilio Therapeutics, Inc. have recently announced a partnership on Xilio's early-stage tumor-focused program, XTX301. As part of this agreement, Gilead will provide Xilio with an initial payment of $43.5 million, which includes a $30 million cash component and a $13.5 million initial investment in Xilio's common stocks at a higher value than usual.

In addition to the upfront payment, Xilio could potentially earn up to $604 million more in the form of contingent payments. These potential bonuses include further investment by Gilead into Xilio's stocks, a transition fee and specific payments that are dependent on the achievement of certain development, regulatory and sales milestones.

Under the contract, Xilio will retain control over the clinical trial's current Phase 1 clinical trial until it reaches the dose expansion stage. Once Xilio submits the complete set of clinical data for XTX301, Gilead has an option to assume responsibility for the program's development and future commercialization. However, this decision is conditional on the agreement's terms and includes a payment of $75 million by Gilead to Xilio.

Before the possibility of incurring a transition fee, Xilio could receive further investments up to $29 million and an additional milestone payment for development. This partnership is anticipated to slightly reduce Gilead's profits per share, as calculated through both GAAP and non-GAAP methods, in 2024 by approximately $0.03 - $0.04.