Transaction Case Studies

SELL-SIDE ENGAGEMENT FOR GRITSTONE LEADING TO A PARTNERSHIP WITH GILEAD FOR $60M UPFRONT AND $725M IN ADDITIONAL PAYMENTS PLUS TIERED ROYALTIES​

Situation Assessment

  • Gritstone Oncology is focused on developing next generation cancer and infectious disease immunotherapies​
  • The company has two key pillars to its technology platforms – a proprietary machine learning-based platform (EDGE™), designed to predict antigens presented on the surface of cells, and multiple potent immunotherapy technologies, including a vaccine platform, that can leverage these antigens​
  • The company engaged Locust Walk as a business development advisor to help the company identify collaboration partners to leverage its platform technologies and pipeline​
  • Locust Walk and Gritstone worked together to run a competitive process, engaging several large pharma parties and eventually negotiating a partnership with Gilead for a potentially curative HIV therapeutic vaccine​​

Key Activities

  • Prepared high-impact marketing materials, emphasizing the company’s unique ability to identify novel antigen targets via EDGE™ that can be applied to its potent heterologous/homologous ChAdV and self-amplifying RNA (SAM) prime/boost vaccine platform that drives large T cell responses​
  • Conducted a highly-specific outreach campaign to global pharma partners with established development and commercialization expertise in infectious diseases, particularly HIV ​
  • Facilitated discussions with interested parties and led numerous potential partners through confidential due diligence​
  • Provided key strategic advice on deal strategy, structure and economics, supported by in-depth valuation materials, including various comparable deals analyses and a risk-adjusted NPV deal model​
  • Worked in collaboration with legal and business development teams to drive transaction to close and negotiate the definitive agreement​

Successful Outcome

  • Gritstone and Gilead successfully completed the largest ever transaction for an early-stage HIV therapeutic with a total deal value of $785M –  including a $60M upfront in cash and equity, development and commercial milestones, as well as mid single- to low double-digit royalties ​
  • Gilead is the preeminent leader in HIV therapeutics, thereby providing Gritstone significant additional platform validation in infectious diseases as the company continues its expansion into therapeutic areas beyond its foundations in oncology​

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