Gilead Sciences and Xilio Therapeutics declared an exclusive license agreement for the development of a tumour-activated IL-12 program.

Under the deal, Gilead Sciences has agreed to give Xilio $43.5m in upfront payments, including a cash payment of $30 million. Gilead will also provide a $13.5m initial equity investment in Xilio’s common stock at a premium. Later on, the clinical-stage biotech may be able to receive up to $604m in extra payments, in additional equity investments by Gilead, a transition fee and specified development, regulatory and sales-based milestones.

According to the agreement, Xilio will also be eligible to accept tiered royalties varying from high single digits to mid-teens on annual global net product sales.

With the new partnership, Xilio will be in charge of the clinical development of XTX301 in the ongoing Phase I clinical trial (NCT05684965) through dose expansion. Once Xilio has fulfilled its role, Gilead can choose to take over the clinical development and commercialisation of XTX301, subject to the terms of the contract and an additional $75m transition fee. Before the payment of this fee, Xilio is eligible to gain up to a total of $29m in additional equity investments and a development milestone payment.

“We believe IL-12 has the potential to treat a broad range of tumour types and are excited to partner with Xilio to advance XTX301, a tumour-activated IL-12, as a monotherapy and a combination therapy across a variety of solid tumours,” said Dr Bill Grossman, Gilead Sciences’s senior vice president of oncology clinical development in the 28 March press release.

XTX301 is an IL-12 activator under development for solid tumours including, head and neck squamous cell carcinoma, melanoma and non-small cell lung cancer. The therapy, which was developed using Xilio’s proprietary tumour-activation platform, acts by activating T-lymphocyte and natural killer cell proliferation, which in turn kills cancer cells. The US-based company is using the platform to develop a pipeline of tumour-activated molecules such as cytokines, bispecifics and antibodies.

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The latest deal with Xilio adds to a chain of deals executed by Gilead Sciences. In the last few months, Gilead has also made headlines for its deals with CymaBay Therapeutics, Merus and Arcus Biosciences.