Why Are Arcus Biosciences Shares Trading Higher Today?

Gilead Sciences Inc (NASDAQ:GILD) has exercised its options to three programs in Arcus Biosciences Inc (NYSE:RCUS) portfolio, including both anti-TIGIT molecules, domvanalimab, and AB308, as well as etrumadenant and quemliclustat.
Under the terms Agreement, Arcus will receive option payments totaling $725 million for the three options that Gilead is exercising today.
The parties will co-develop and share the global costs related to these programs.
If the optioned molecules achieve regulatory approval, Gilead and Arcus will co-commercialize and equally share profits in the U.S.
Gilead will hold exclusive rights outside the U.S. and will pay Arcus tiered royalties.
Upon closing of the transaction for all three programs, the $100 million option continuation payment due in 2022 will not be made by Gilead.
In May 2020, Gilead and Arcus entered into a 10-year collaboration that provided Gilead immediate rights to zimberelimab and the right to opt into all other Arcus programs arising during the collaboration term.
SVB Leerink analyst Geoffrey Porges maintained Arcus Biosciences with an Outperform and raised the price target from $68 to $100.
Price Action: RCUS shares are up 15.4% at $42.61 during the market session on the last check Thursday.