After Trodelvy's approval in China, Gilead strikes $455M deal with Everest for Asian rights

When Gilead Sciences acquired Immunomedics in 2020, another company owned certain rights to the deal's crown jewel Trodelvy. Now, Gilead thinks it’s time to take it back.

Gilead is shelling out $280 million upfront to gain Trodelvy rights from Chinese company Everest Medicines in certain Asian territories including China, South Korea, Singapore and others, the two companies said Monday. Everest could also receive up to $175 million in potential regulatory and commercial milestone payments down the line.

The news comes just two months after Everest won a Trodelvy nod in China for triple-negative breast cancer (TNBC) following at least two prior systemic therapies, including at least one for metastatic disease. It marked both Trodelvy’s and Everest’s first approval in China. At that time, Everest said it planned to launch the drug in the fourth quarter.

For Gilead, the deal allows the California biotech to take full control of Trodelvy, a cornerstone of the company’s portfolio in solid tumors.

“Retaining the rights to Trodelvy in these markets will help establish our oncology presence in Asia, providing an initial foundation from which we can build,” Gilead said in a statement.

Through the deal, Gilead will have the opportunity to recruit some Everest employees who have been working on Trodelvy, the companies said. As of the end of 2021, Everest had built a 128-person commercial team for upcoming Trodelvy launches this year, according to the company’s annual report.

Meanwhile, Trodelvy has just posted positive trial readouts, which could expand its reach into the larger HR-positive, HER2-negative breast cancer arena. But AstraZeneca and Daiichi Sankyo’s Enhertu is now looking to carve out big pieces of the TNBC and HR-positive breast cancer markets thanks to a landmark FDA approval in HER2-low breast cancer, a brand-new category that includes many patients who were traditionally considered HER2-negative.

Enhertu’s historic win is viewed as boosting competitive pressure on Trodelvy even though their target patient populations don’t completely overlap. And it also adds uncertainty to Trodelvy’s commercial prospects in Asia, especially in China, where AstraZeneca is known as a commercialization powerhouse.

As for Everest, the Chinese biotech has adopted an in-licensing business model, bringing in foreign medicines for Asia. The company got Trodelvy rights in Asian countries by paying Immunomedics $65 million upfront in 2019, over a year ahead of the Gilead takeover. Everest also paid an additional $60 million upon Trodelvy’s first FDA nod and has been on the hook for up to $710 million in milestone payments, plus tiered royalties based on sales.

Everest had labeled Trodelvy as its “anchor” drug in oncology. Now seemingly worried about Everest’s long-term position, investors sent the company’s Hong Kong shares down by 19% during Tuesday’s trading.

In a filing (PDF) to the Hong Kong Exchange, Everest cited “the broader macroeconomic and capital markets backdrop,” plus “the business prospects, investment necessary and risks associated with commercializing” Trodelvy among its reasons for selling the rights.

The deal is definitely a short-term relief for Everest. The company said it will use the money to fund additional dealmaking activities, clinical development of Calliditas Therapeutics-partnered kidney disease drug Nefecon in several Asia countries and other pipeline assets.