Gilead's $7.8B Arcellx Buy: A Costly Cell Therapy Gamble Amid Lingering HIV Risks

What happened

Gilead Sciences is acquiring Arcellx for $7.8 billion to gain full control of anito-cel, a cell therapy for multiple myeloma, aiming to boost its oncology pipeline. This move targets Gilead's struggling cell therapy segment, which faces declining sales and a guided ~10% revenue drop in 2026 due to competitive headwinds. The acquisition underscores management's aggressive push to diversify beyond HIV, where core products like Yeztugo confront payer access challenges and pricing pressures. However, the deal's high price tag strains finances, potentially diverting resources from shareholder returns and the critical HIV franchise. Ultimately, this acquisition highlights Gilead's urgency to revive cell therapy but doesn't alter the investment thesis centered on HIV execution and Yeztugo's ramp.

Implication

The $7.8 billion cost for Arcellx adds significant financial burden, likely increasing leverage or depleting cash reserves needed for dividends and buybacks, amid already tight margins from Medicare pricing pressures. Full control of anito-cel could accelerate its launch, but it enters a competitive multiple myeloma market where Gilead has been losing share, with no guarantee of reversing cell therapy declines. While aiming to bolster oncology, this deal ignores ongoing commercialization friction for Yeztugo, such as CVS exclusions and undisclosed re-dosing metrics critical for its $800M 2026 target. Investors should view this acquisition skeptically, given Gilead's history of oncology setbacks and the need for tangible evidence on Yeztugo's success before altering the cautious stance. In the near term, the focus must remain on HIV execution, making this cell therapy move a secondary concern until it demonstrates clear revenue impact and integration success.

Thesis delta

The core thesis of Gilead as an HIV cash-flow compounder dependent on Yeztugo's ramp remains unchanged, but this acquisition introduces potential upside in cell therapy through anito-cel. However, it adds execution and integration risks, reinforcing the 'WAIT' rating until mid-2026 data confirms both Yeztugo's access progress and the acquisition's financial and competitive impact.