What happened

Arcus Biosciences, Inc. (RCUS -0.71%), a clinical-stage oncology company, is up big this morning. Specifically, the drugmaker's shares are up by an astounding 84% as of 10:16 a.m. EDT Thursday morning. 

What's sparking this monstrous move higher? In pre-market action, a rumor surfaced that Gilead Sciences (GILD 1.06%) was considering an equity stake in Arcus. This move, if it does indeed come to fruition, would give the biotech heavyweight access to the company's robust, yet fairly early-stage pipeline of unique immuno-oncology assets, such as the anti-TIGIT monoclonal antibody AB154. 

Black and white photo of two businessmen shaking hands over a table.

Image Source: Getty Images.

So what

Not long ago, Gilead Sciences was rumored to have an interest in striking a partnering deal with another clinical-stage biotech company, Forty Seven. A few days later, the two companies announced a $4.9 billion buyout offer. Arcus' shareholders are clearly hoping the same scenario plays out again. After all, the company's new market cap of $1.39 billion might be hard to justify if Gilead and Arcus simply announce a smallish partnering deal for one specific drug candidate. 

Now what

Before investors get too excited, it's important to note that neither company has confirmed these partnering talks. What's more, the unnamed source of this rumor said a deal could still fall apart. Investors shouldn't count their chickens before they hatch. 

On the bright side, Arcus' pipeline would dovetail nicely with Gilead's Kite Pharma subsidiary and its newly acquired assets from Forty Seven. So, in many ways, an Arcus-Gilead pairing does make a lot of sense.