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Gilead awaits CEO and readouts to revive fortunes

NASH and oral RA drugs set for crucial readouts


Gilead saw its revenues and profits decline steeply in 2018, with the arrival of generic competition in HIV in Europe adding to the inexorable shrinkage of its hepatitis C franchise.

Income for the full year fell 8% and earnings per share fall back 25% to $6.67, though there was some indication of the declines levelling off, with Q4 revenues just under the same period last year at $5.79bn

The company is currently in an interregnum, having said goodbye to the execs who transformed its fortunes with stellar success in HIV and hepatitis C, chairman John Martin and CEO John Milligan, it now awaits the arrival of new CEO Daniel O’Day on 1 March.

In the meantime, another Gilead veteran exec, Gregg Alton, is standing in as interim chief executive, and presented the firm’s plans for 2019 to analysts on Monday.

Despite the decline in hep C, Gilead is hopeful of a revival in revenues over the next few years. This is thanks to its HIV franchise, which grew 16% over the year to $14.6bn, hopes of faster growth from its CAR-T pioneer Yescarta, plus a handful of late-stage blockbuster candidates.

The company’s new ‘one pill once a day’ HIV treatment Biktarvy has become the best HIV launch of all time in the US. It earned $551m in the fourth quarter and picked up both treatment-naïve patients and those switching from other drugs, including GSK’s rival drug Tivicay and its own established product Genvoya.

In Europe, Gilead says it is encouraged by uptake in Germany and France, and anticipates launches in Spain, Italy and the UK by mid-2019.

Gilead’s new drug is facing competition from GSK’s new arrival in HIV, Juluca. Gilead saw its HIV revenues shrink in Europe due to the expected arrival of generics, but predicts this will be reversed once Biktarvy is ‘entrenched’ across Europe.

As the HIV franchise will face generics in the US and Europe this year, and its hepatitis C franchise will continue its decline, Gilead is looking to CAR-T Yescarta to produce strong growth in 2019 – it predicts the groundbreaking cell therapy can double its revenues to around $500m.

However buried in the Q4 results was a nasty surprise linked to Kite, the CAR-T company Gilead acquired in 2017.  It has decided to abandon anti-BCMA cell therapy KITE-585 for multiple myeloma (in the face of a crowded field of more advanced players) requiring a hefty $820m impairment charge.

This puts more pressure on the success of pivotal data readouts from two potential blockbusters the first half of 2019: selonsertib, an ASK1 inhibitor being studied in patients with advanced fibrosis and the fatty liver disease non-alcoholic steatohepatitis (NASH) and selective JAK1 inhibitor filgotinib in rheumatoid arthritis.

Gilead is among half a dozen companies competing to be leaders in NASH treatment, which analysts believe could be the next new multi-billion market.

Two parallel trials, STELLAR 3 and STELLAR 4 of selonsertib will be crucial to its success, and will be compared with data from Intercept’s Ocaliva, its biggest rival to become the first approved NASH treatment.

Also of great importance are two phase 3 studies, FINCH 1 and FINCH 3 of filgotinib in rheumatoid arthritis. The once-a-day oral drug has already shown efficacy on a par with rival drugs from Lilly and AbbVie, and the phase 3 data could be crucial in deciding who has the edge in this very crowded market.


CEO in waiting, Daniel O'Day

Waiting for Daniel O’Day to take the helm, analysts can only speculate what the ex- Roche pharma division chief will prioritise in his mission to revive Gilead’s prospects.

The natural conclusion is that O’Day will look to expansion into cancer, a field where Gilead has so far had limited success.

The new chief exec inherits a cash warchest of $31.5bn, which could fund major M&A. However, despite the recent $74bn mega-merger of BMS and Celgene, the mood in the sector looks to be towards bolt-on acquisitions which can create more long term value.

Article by
Andrew McConaghie

6th February 2019

From: Marketing



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