Gilead Sciences, Inc. (NASDAQ:GILD) Parts With $200 Million In Favor Of Nimbus

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Gilead Sciences, Inc. (NASDAQ:GILD) Parts With $200 Million In Favor Of Nimbus

Gilead Sciences, Inc. (NASDAQ:GILD) has issued a $200 million check to Nimbus Therapeutics as a milestone payment. About six months ago, Gilead acquired Nimbus’ experimental drug for treating non-alcoholic steatohepatitis (NASH), paying $400 million upfront for the drug asset.

However, the companies entered into an agreement that promised Nimbus another $800 million in milestones if its candidate met certain targets. As such, the latest $200 million payment relates to the drug meeting R&D targets only six months after it was purchased. With the latest payment, Nimbus has received half of the possible $1.2 billion it was promised when it sold its NASH drug candidate to Gilead.

Nimbus’s NASH drug, earlier known as NDI-010976 and now named GS-0976 at Gilead, is an ACC inhibitor. According to Nimbus, the NASH drug it sold to Gilead was designed completely on computer and has become the first of its kind to be tested on human. “[It’s] an important validation of our unique computational chemistry approach,” Nimbus CEO Don Nicholson said of the drug.

Nimbus Therapeutics has raised about $67 million in venture funding. Other than Gilead, the company has partnerships with Genentech and Monsanto Company (NYSE:MON).

R&D tests on the NASH candidate

Gilead is running several tests on GS-0976 and it has already completed one. The completed test assessed the compound on healthy but obese men. The test aimed to assess the drugs pharmacodynamics. Another study is in progress and it is aimed at assessing pharmacokinetics of GS-0976. The ongoing study is being carried out in adults with impaired and normal hepatic function.

Gilead’s 3Q16 earnings miss expectations

Gilead posted 3Q16 EPS of $2.75, down from $3.22 in a similar quarter last year and below the consensus estimate of $2.86. Revenue of $7.50 billion declined 9.6% YoY. For full-year 2016, the company is looking for EPS in the band of $1.47 – $1.53.

Gilead stocks eased more than 1% to $71.76 in regular trading of the last session, but gained 0.06% in the afterhours trading. The stock is down nearly 30% YTD.