$5 billion dollars thrown into the ADC track, Gilead Sciences, Inc. (GILD.US) acquires Germany's Tubulis at a high price.

Gilead Sciences, Inc. (GILD.US) has agreed to acquire the German private biotechnology company Tubulis GmbH in a deal worth up to $5 billion. This move is aimed at strengthening its business portfolio in the fast-growing field of cancer drug development. In a statement released on Tuesday, the two companies announced that Gilead will pay an initial cash payment of $3.15 billion, with an additional payment of up to $1.85 billion if certain milestones are met. The transaction is expected to be completed in the second quarter. Tubulis is a key player in the field of novel drugs, with technology that involves delivering potent compounds that kill cancer cells directly to tumors. These drugs, known as antibody-drug conjugates (ADCs), have the potential to improve existing therapies. This field has sparked a wave of mergers and acquisitions in the pharmaceutical industry, including Pfizer Inc.'s $43 billion acquisition of Seagen Inc. in 2023. Gilead CEO Daniel O'Day stated in the announcement that this deal "represents a significant milestone in Gilead's progress in oncology." He noted that it will provide the company with a potential new drug for ovarian cancer, as well as a broader platform for producing next-generation ADC drugs. Gilead currently sells a breast cancer ADC drug called Trodelvy. Tubulis is conducting clinical trials for drugs targeting ovarian cancer, lung cancer, and other types of tumors. The company has partnerships with Bristol-Myers Squibb Company and already collaborates with Gilead on one of its drugs. Data shows that the ovarian cancer market could be worth $5.6 billion by 2030, and Tubulis has the potential to challenge giants like AstraZeneca and Roche in this field. After the completion of the transaction, Tubulis will become a dedicated ADC research department within Gilead, with its base in Munich serving as the center for this research work. This is Gilead's third major deal this year. In March, the company announced the acquisition of Ouro Medicines, a private company testing antibody drugs for autoimmune diseases, for up to $2.18 billion. In February, the company announced plans to acquire the cancer-focused biotechnology company Arcellx Inc. for up to $7.8 billion to enhance its research pipeline.