Thursday, April 25, 2024
Stock Market

Why Is Arcellx (ACLX) Stock Up 25% Today?

Investors of Arcellx (NASDAQ:ACLX) stock are in a great mood today, and the reason is no mystery. Acrellx just disclosed that it’s teaming with biopharmaceutical giant Gilead Sciences (NASDAQ:GILD). Together, the two companies intend to co-develop the drug that Arcellx has been advancing to treat specified patients with multiple myeloma.

Arcellx rarely trends on social media, but today is a notable exception. The buzz surrounding this small-to-mid-sized drugmaker is growing as Arcellx’s chances of successfully addressing an unfortunate condition just got a whole lot better.

That’s because Arcellx now has a potent partner, none other than biotech behemoth Gilead Sciences. These two firms are collaborating to develop CART-ddBCMA, which is Arcellx’s proposed treatment for patients suffering from relapsed or refractory multiple myeloma.

This is huge news for Arcellx and its stakeholders, of course. Yet, there are also major implications for the medical community. Multiple myeloma is, unfortunately, an incurable disease for the majority of patients. As the press release points out, there’s a need for “effective, safe, and broadly accessible therapies” for this condition.

What’s Happening With ACLX Stock?

Just maybe, Arcellx can co-develop an “effective, safe, and broadly accessible” treatment for multiple myeloma with Gilead Sciences. ACLX stock traders seem confident about this possibility, as the shares rallied over 25% this morning.

Perhaps they’re not solely focused on the medical implications of this team-up. Rather, today’s traders are probably interested in the financial ramifications. Specifically, Gilead Sciences agreed to pay Arcellx $225 million upfront. Furthermore, Gilead has committed to a “$100 million equity investment as well as other potential contingent payments.”

In other words, Arcellx stands to potentially gain more than $325 million worth of cash and payments from this arrangement. Not only that, but Gilead and Arcellx will “jointly commercialize the product and split U.S. profits 50/50.”

That’s more potential capital inflow for Arcellx, and a greater opportunity to get its treatment to multiple myeloma patients. This certainly sounds like a win-win scenario, and suffice it to say, ACLX stock investors are on the winning end of the trade today.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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