Gilead moves further into I-O via partnership with Arcus Biosciences

In a surprise market reaction following the announcement of a lucrative collaboration agreement today, US oncology-focussed biotech Arcus Biosciences (NYSE: RCUS) saw its shares fall nearly 13% to $29.20 by late morning.

Gilead Sciences (Nasdaq: GILD) and Arcus have entered into a 10-year partnership to co-develop and co-commercialize current and future therapeutic product candidates in Arcus’s pipeline. As well as an upfront $175 million, and equity investment and up to $1.6 billion in milestones, the agreement will also provide ongoing funding to support Arcus’s research and development programs.

The market reaction could be disappointment that Gilead was not buying Arcus, or at least a big stake, as had been rumored back in April.