Gilead Sciences (GILD.US) said on Thursday that it will acquire PepStar Therapeutics' oral inflammation drug program, including an experimental gut disease therapy, for $1.275 billion in cash upfront.
The deal adds an inflammatory bowel disease (IBD) candidate to its portfolio, coming after Gilead's experimental oral drug for chronic intestinal disease, emvistegrast, posted positive interim results on Monday.
Gilead said it believes HCXT-2001 has the potential to be developed on its own or in combination with other programs in its pipeline.
Inflammatory bowel disease is a group of long-term conditions in which the immune system causes inflammation of the digestive tract.
Gilead said HCXT-2001 is designed to block the IL-23 receptor, part of an immune pathway involved in inflammatory diseases.
Citi analyst Geoffrey Meacham said the $1.275 billion upfront payment is notable given that HCXT-2001 is still in early-stage testing and has no published clinical data.
Meacham said the acquisition strengthens Gilead's inflammation and immunology strategy while giving it an opportunity to expand long-term growth beyond its core HIV business.
Gilead said the transaction is expected to close in the last quarter of this year, and the company will gain global rights to the program.
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