Recent initial public offering Arcellx forged a $325 million multiple myeloma deal with Gilead Sciences on Friday, and the IPO stock broke out.
The news comes in lockstep with promising long-term results for Arcellx's multiple myeloma treatment. Every patient with at least one month of follow-up responded to Arcellx's drug. Almost three-quarters of them, 71%, reached a complete response, meaning they showed no detectable signs of cancer.
Now, Gilead will pay Arcellx $225 million up front and make a $100 million equity investment in the IPO stock. In return Gilead's Kite division will codevelop and co-commercialize the multiple myeloma drug. Arcellx will also be eligible for milestone payments and some royalties. Gilead acquired cancer drug specialist Kite Pharma in 2017.
In morning trading on the stock market today, IPO stock Arcellx rocketed 29.2% to close at 28.02. That pushed shares above a buy point at 27.01 out of a consolidation, according to MarketSmith.com. Gilead was nearly flat at 88.
IPO Stock: 100% Response Rate
The long-term results, also announced Friday, are promising for the multiple myeloma treatment.
Arcellx evaluated 38 patients who received treatment at least one month ago. The patients all had poor prognoses and had worsened while receiving at least three prior treatments. Every patient responded to the experimental drug, with 71% showing no detectable signs of cancer.
Of those who received treatment 12-18 months ago, 100% responded to treatment. In the group treated a year ago, 80% had no detectable signs of cancer at their November checkup. For those who received Arcellx's treatment 18 months ago, 81% had complete responses.
Bullishly for the IPO stock, there were no serious cases of cytokine release syndrome, or CRS. CRS is a common side effect of cell therapies like Arcellx's in which the immune system overreacts to the drug, causing systemic problems.
50-50 Profit Split In The U.S.
Now, Arcellx will forge ahead with Gilead's Kite to codevelop and co-commercialize the drug.
In addition to the upfront cash and equity, Arcellx will also be eligible for up to $3.9 billion in milestone payments. The company will receive a midteens royalty on sales outside the U.S. Arcellx and Gilead will split U.S. profits 50-50.
The news Friday sent Arcellx stock to its highest-ever point.
Though Arcellx is only nine months out from its initial public offering, shares have a strong Relative Strength Rating of 92, according to IBD Digital. This puts the IPO stock in the leading 8% of all stocks in terms of 12-month performance.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
