Gilead Sciences Inc. (GILD): Acquisition of oral IL-23 supports long-term I&I strategy

Gilead announced a definitive agreement to acquire PepStar Therapeutics' oral IL-23R inhibitor program, including lead asset HCXT-2001, for $1.275bn in upfront cash. HCXT-2001 is a Phase 1 oral macrocyclic peptide offering a potentially differentiated profile, with an extended half-life supporting once-daily or less frequent dosing. The deal adds a second oral, clinically validated mechanism to GILD's I&I pipeline and creates an immediate opportunity for an all-oral combination with emvistegrast, its oral α4β7 inhibitor, in IBD, with potential monotherapy use across other immune-mediated diseases. GS views the strategic rationale as clear but notes the asset remains early-stage with no publicly disclosed efficacy data. The transaction is expected to close in 4Q26 and reduce 4Q26 GAAP and non-GAAP EPS by approximately $0.79-0.83. Maintain Neutral, $142 12-month price target (DCF, 3% TGR, 8% WACC), implying 9.7% downside.