Investment banking coverage of Gilead Sciences (NASDAQ:GILD) remains constructive after the company formalized its purchase of Arcellx, with Morgan Stanley reiterating an Overweight recommendation and maintaining a $171.00 price target on the stock.
The deal assigns an implied equity value to Arcellx of $7.8 billion. Transaction terms call for $115 per share in cash at closing plus one contingent value right worth $5 per share, payable if cumulative global net sales of anito-cel reach at least $6 billion from launch through year-end 2029. Prior to the agreement, Gilead already owned roughly 11.5% of Arcellx's outstanding common stock.
Strategic and financial position
The acquisition gives Gilead full worldwide rights to anito-cel, the BCMA-directed CAR T-cell therapy currently under FDA review for patients with late-line multiple myeloma. Under prior arrangements, Gilead held economics equivalent to 50% of net profit in the U.S. and the net profit outside the U.S., with Arcellx entitled to low- to mid-teens percentage royalties. The definitive agreement replaces that structure with full ownership and eliminates up to $1.5 billion of potential future development and regulatory milestone obligations that might otherwise have been payable to Arcellx.
Gilead is entering the transaction from a strong balance sheet position. The company carries a market capitalization of $185.92 billion. According to InvestingPro data cited in the filing, Gilead scores a 9 on the Piotroski Score and receives an overall financial health designation of "GREAT," indicators that reflect operational efficiency and balance-sheet strength.
Regulatory path and development plans
The FDA has accepted the biologics license application for anito-cel for treatment of fourth-line or later relapsed/refractory multiple myeloma. The PDUFA target action date is December 23, 2026. That application is supported by data from the iMMagine-1 clinical trial. Concurrently, Gilead and Arcellx are enrolling patients in the iMMagine-3 study, which covers the second- to fourth-line treatment settings, and the companies indicate an FDA submission could follow as early as 2027 based on those later-line data.
Expected timing, financing and near-term earnings impact
Gilead expects the transaction to close in the second quarter of 2026, subject to customary closing conditions. The company plans to finance the purchase with cash on hand. Management anticipates the acquisition will be modestly dilutive to non-GAAP earnings per share in 2026 and 2027, and accretive thereafter, excluding the accounting impact of transaction-related in-process research and development charges.
Market reaction and broader analyst activity
Investors have reacted favorably to Gilead's recent strategic initiatives. The stock has returned 41.55% over the prior 12 months and has been trading near its 52-week high of $157.29. InvestingPro analysis referenced alongside the deal commentary indicates the equity remains slightly undervalued at current prices.
Several other sell-side firms have updated their coverage around the same period. Barclays initiated coverage with an Equalweight rating and a $155 price target. UBS raised its price target to $175, citing promising Phase I data for long-acting HIV treatment candidates. Wolfe Research adjusted its target to $170, noting strong performance in Gilead's HIV business, including a 31% year-over-year increase in Descovy sales and $150 million of sales attributed to the Yeztugo launch. Truist Securities lifted its price objective to $152 after Gilead reported fourth-quarter 2025 results that beat expectations, driven by a robust HIV franchise.
Together, those analyst moves underscore a market view that Gilead is strengthening its infectious disease portfolio while expanding into next-generation oncology assets through the Arcellx transaction.
Contextual note for investors
From a capital-allocation perspective, the transaction converts Gilead's partial economic exposure to anito-cel into full control of a late-stage asset while removing certain contingent milestone liabilities. The company’s guidance on near-term non-GAAP dilution provides a clear expectation about earnings trajectory through the integration period. The regulatory timeline, including the December 2026 PDUFA date for the current BLA and the potential 2027 filing for second-line indications, will be critical milestones to monitor.
As always, the transaction remains subject to the usual closing conditions and the outcome of ongoing regulatory review of anito-cel.