Gilead Sciences (NASDAQ:GILD) announced Tuesday it's paying $300 million for a 49.9% ownership stake in Tizona Therapeutics and an option to acquire the company outright later for up to $1.25 billion in fees and potential milestone payments.

The deal provides the privately owned company with financing to support the development of TTX-080, a potential first-in-class immunotherapy targeting HLA-G, an immune checkpoint molecule expressed in multiple tumor types. A phase 1 study of HLA-G as monotherapy and in combination with existing treatments is set to begin enrolling patients this quarter.

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If successful, TTX-080 could offer an alternative treatment for patients who don't respond to checkpoint inhibitors targeting the immune checkpoint PD-1, including the blockbuster drugs Opdivo and Keytruda. TTX-080 may enhance the efficacy of PD-1 inhibitors, suggesting there's also a potential pathway to improving the standard of care in eligible solid tumor cancer patients.

The biotech giant will be able to exercise its option to acquire the remaining equity of Tizona Therapeutics "following the completion of Phase 1b studies for TTX-080, or earlier."

Management expects this deal to close in the third quarter, after Tizona has spun-out its other drug in development, TTX-030, as a separate company. An anti-CD39 antibody, TTX-030 is being developed in partnership with AbbVie (NYSE:ABBV).