Could Gilead News Be Good For Biotech ETFs? | ETF Trends

In a sea of red stocks on Wednesday, as fear grips markets due to another spike in coronavirus cases throughout the country, Gilead Sciences is one of the few bright spots in the stock market.

Gilead Sciences released news yesterday that for $275 million, the company will acquire a 49.9 percent equity interest in Pionyr Immunotherapeutics Inc., a privately held company developing premier cancer immunotherapies, and the sole option to buy the remainder of Pionyr. Under the agreement, Pionyr’s shareholders may obtain as much as a $1.47 billion in option exercise fees and future milestone payments.

“Pionyr is pursuing promising, novel biology in the field of immuno-oncology,” said Daniel O’Day, Chairman and Chief Executive Officer, Gilead Sciences. “The agreement represents important progress as we continue to build out Gilead’s presence in immuno-oncology with innovative and complementary approaches. We look forward to seeing the programs advance with the goal of developing new therapies that will improve the treatment of cancer.”

“This agreement underscores the value of our myeloid tuning platform and the potential of our pipeline of antibody therapeutics designed to turbocharge the immune system within the tumor microenvironment,” said Steven P. James, President and Chief Executive Officer, Pionyr. “PY314 and PY159 are first-in-class antibodies designed to remove or reprogram, respectively, the immune suppressive cells in the tumor microenvironment and thereby enhance anti-tumor immunity. We are grateful that Gilead has acknowledged the promise of this transformational approach to potentially benefit patients across a range of solid tumors.”

Meanwhile, Gilead has claimed it would deploy roughly $1 billion on remdesivir R&D in 2020. The company recently said it’s anticipated to augment the remdesivir supply by 2 million courses this year, though many doses have been committed to donations.

Wall Street analysts note the drug could create billions of dollars in revenue over the next two years, given that the pandemic continues.

The move could be good news for biotech ETFs like the VanEck Vectors Biotech ETF (BBH), the iShares Nasdaq Biotechnology ETF (IBB), and the Invesco Dynamic Biotechnology & Genome ETF (PBE), which all hold healthy allocations of Gilead.

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