Gilead to Acquire All Remaining Rights to Potential First-In-Class Immunotherapy

Gilead Sciences, Inc. and Jounce Therapeutics, Inc. amended their existing license agreement for GS-1811 (formerly JTX-1811), enabling Gilead to buyout remaining contingent payments potentially due under the license agreement executed in August 2020.  As part of the transaction, certain operational obligations of the parties related to GS-1811, an anti-CCR8 antibody, set forth in the license agreement have also been terminated. Gilead will acquire certain related intellectual property, including all outstanding rights of Jounce to GS-1811, pursuant to the transaction agreement. GS-1811, a potentially first-in-class immunotherapy, is designed to selectively deplete immunosuppressive tumor-infiltrating T regulatory cells in the tumor microenvironment and is currently in Phase 1 clinical development as a possible treatment for patients with solid tumors.

“We are pleased to announce the signing of this transaction with Gilead who have a strong track record of developing and successfully commercializing leading brands in biotechnology,” said Richard Murray, PhD, Chief Executive Officer and President of Jounce. “This transaction allows us to extend our runway and remain focused on delivering meaningful and long-lasting benefits to cancer patients. It was important for Jounce at this time to bolster our cash resources given challenges in capital markets for biotech companies.”

Jounce will receive proceeds of $67 million for this transaction and Gilead will be solely responsible for all further research, development, and commercialization of GS-1811 globally.

“Today’s news about GS-1811 further demonstrates our commitment to our rapidly evolving oncology franchise and mission of pioneering next-generation medicines for people with cancer,” said Bill Grossman, MD, PhD, Senior Vice President, Therapeutic Area Head, Gilead Oncology. “GS-1811, with its potential new pathway of activating the immune system, gives us the opportunity to potentially change the standard of care with a treatment that works from inside cancerous cells to shrink solid tumors.”

Beginning in the first quarter of 2022, consistent with recent industry communications from the U.S. Securities and Exchange Commission (SEC), Gilead no longer excludes acquired IPR&D expenses from its non-GAAP financial measures. We expect the transaction with Jounce to reduce Gilead’s GAAP and non-GAAP 2022 EPS by approximately $0.04.

Jounce will no longer be entitled to receive the remaining contingent payments of up to $645 million in milestones and high single digit to mid-teens royalties based upon worldwide sales under the original license agreement. Additional details of the transaction, including related agreements and matters, will be contained in a Current Report on Form 8-K to be filed by Jounce.

Jounce Therapeutics, Inc. is a clinical-stage immunotherapy company dedicated to transforming the treatment of cancer by developing therapies that enable the immune system to attack tumors and provide long-lasting benefits to patients through a biomarker-driven approach. Jounce currently has multiple development stage programs ongoing while simultaneously advancing additional early-stage assets from its robust discovery engine based on its Translational Science Platform. Jounce’s highest priority program, JTX-8064, is a LILRB2 (ILT4) receptor antagonist shown to reprogram immune-suppressive tumor associated macrophages to an anti-tumor state in preclinical studies. JTX-8064 is being investigated alone and in combination with pimivalimab (formerly JTX-4014), Jounce’s internal PD-1 inhibitor, in one monotherapy and seven indication-specific combination therapy cohorts in the Phase 1/2 INNATE trial and is currently enrolling patients with advanced solid tumors in the Phase 2 portion of the study. Jounce’s most advanced product candidate, vopratelimab, is a monoclonal antibody that binds to and activates ICOS, and is currently being studied in the SELECT Phase 2 trial. Pimivalimab is a PD-1 inhibitor intended for combination use with Jounce’s broader pipeline. For more information, visit www.jouncetx.com.