Gilead Sciences (GILD) Expands Cancer Pipeline With $5 Billion Tubulis Acquisition

TLDR

• Gilead agreed to acquire German biotech Tubulis GmbH for up to $5 billion, with $3.15 billion paid upfront.
• The deal expands Gilead’s antibody-drug conjugate (ADC) pipeline, targeting cancers including ovarian cancer and non-small cell lung cancer.
• RBC Capital raised its price target on GILD to $123 from $118, though it kept a Sector Perform rating.
• RBC sees Yeztugo potentially beating Q1 consensus by $180 million, but flagged some risk if compliance and market expansion slow.
• Cantor Fitzgerald, UBS, and Deutsche Bank all hold Buy or Overweight ratings, with price targets up to $155.

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Gilead Sciences (GILD) is expanding its cancer drug pipeline with a deal to buy Munich-based Tubulis GmbH for up to $5 billion in cash.

The upfront payment comes in at $3.15 billion, with up to $1.85 billion more tied to future milestones. Gilead plans to fund the deal using cash on hand and senior unsecured notes, with closing expected in Q2 2026.

The target, Tubulis, is a biotech focused on antibody-drug conjugates — a type of cancer therapy that attaches chemotherapy directly to cancer cells, leaving healthy tissue alone. Their lead drug, TUB-040, is currently in Phase 1b/2 trials for platinum-resistant ovarian cancer and non-small cell lung cancer.

Gilead Sciences, Inc., GILD

CEO Daniel O’Day called the pipeline addition potentially the strongest and most diverse in the company’s history.

The stock slipped around 1.37% on the news Tuesday, which is a fairly typical reaction when a company announces a large upfront cash outlay.

RBC Raises Price Target But Keeps Neutral Stance

RBC Capital Markets lifted its price target on GILD to $123 from $118 but kept a Sector Perform rating — essentially a hold. The firm pointed to strong early tracking of Yeztugo, Gilead’s newer drug, across third-party script data.

RBC estimates Yeztugo could deliver a Q1 beat of around $180 million above the $141 million consensus. That’s a meaningful gap if it plays out.

But RBC also flagged some caution. The firm noted that buy-side expectations for the full year 2026 may already be baked in at roughly $1 billion. If compliance rates or market expansion don’t hold up, those ambitious peak estimates could come down.

Compliance is currently tracking at around 70%, per RBC’s checks — not bad, but not a number that leaves much room for slippage.

RBC also flagged seasonal softness elsewhere. HIV revenue is estimated at $4.8 billion versus the $4.9 billion consensus, and Veklury revenue at $141 million versus $216 million expected by the Street.

Gilead is set to report Q1 earnings on April 23.

Other Analysts Stay Bullish

Not everyone is holding back. Cantor Fitzgerald reiterated an Overweight rating with a $155 price target, pointing to strong prescription trends across Gilead’s HIV portfolio.

UBS also maintained a Buy rating, citing a 56% month-over-month jump in Yeztugo sales in February. Deutsche Bank kept its Buy and $155 target as well, projecting Q1 Yeztugo sales of around $118 million.

Separately, Gilead also extended the deadline on its tender offer for Arcellx common stock to April 24, 2026. The deal offers $115.00 per share in cash, plus contingent value rights tied to future sales milestones.

With Q1 earnings due April 23, all eyes will be on whether Yeztugo’s strong early numbers translate to a real beat.

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