Gilead Sciences, Inc.’s (NASDAQ:GILD) only approved cancer drug came under fire on Friday, after European and US regulators raised serious concerns over its safety. Regulators are closely reviewing data on Zydelig for a definitive answer on its safety; meanwhile, Gilead has halted several studies of the drug against different types of blood cancer.
Safety Issues
The European Medicines Agency (EMA) said on Friday that it has started a review of Zydelig following an increased rate of serious harmful events including deaths, mostly due to infections, in three clinical trials testing the drug in combination with other cancer treatments. The trials enrolled patients with chronic lymphocytic leukemia (CLL) and indolent non-Hodgkin lymphoma — Zydelig’s approved indications in Europe. However, EMA noted that the CLL study investigated currently unapproved drug combinations, while the lymphoma study involved patients with disease conditions not covered by the drug’s label.
“EMA will now review the data from these studies to assess whether the findings have any consequences for the authorized uses of Zydelig. In the meantime, patients starting or on treatment with Zydelig should be carefully monitored for signs of infections. If Zydelig is well tolerated, treatment should not be stopped,” the agency posted on its website.
The Food and Drug Administration (FDA), at the same time, is “aware of and is looking into reports of deaths” in the Zydelig trials, spokeswoman Angela Stark said in an emailed statement. “The safety of patients is a top priority and the FDA will communicate new safety-related information on Zydelig as it becomes available,” she added. In the US, the drug is cleared to treat relapsed CLL in combination with Roche’s Rituxan, as well as relapsed follicular B-cell non-Hodgkin lymphoma and relapsed small lymphocytic lymphoma, another form of non-Hodgkin lymphoma.
Gilead was also testing the drug as first-line therapy in CLL patients and in patients with indolent non-Hodgkin lymphoma after other therapies or as the first drug. According to Bloomberg, company spokesperson Sonia Choi said on Friday that these studies will be terminated while the drug is under review. She also said Gilead continues to believe in Zydelig’s efficacy in treating relapsed forms of both cancers.
Little Hope forZydelig?
Gilead launched Zydelig around the same time when several other potential blockbuster cancer drugs were making their way to the market. In November 2013, the FDA approved Gazyva, Roche’s follow-up to aging best-seller Rituxan. In February the next year, Imbruvica from AbbVie and partner Johnson and Johnson won the FDA’s green signal. AbbVie CEO Richard Gonzalez expects the drug to pull in $7 billion in peak annual revenue for the company. As per Evercore ISI analyst Mark Schoenebaum, AbbVie’s estimate puts combined annual sales from the drug at around $11.5-12 billion. Last week, the FDA cleared Imbruvica for front-line use against CLL, making it the first chemotherapy-free option for patients suffering from the disease. In April 2014, the FDA also expanded the use of GlaxoSmithKline’s Arzerra to previously untreated CLL, in combination with a common chemotherapy drug.
Hence, Zydelig’s entry into the market has already been overshadowed by multiple other leukemia launches. The drug pulled in barely $132 million in sales last year, although Bloomberg estimate points to some $821 million of revenue by 2020. The drug already carries a black-box warning indicating major risks, including possibly fatal liver complications. Leerink Partners analysts Michael Schmidt and Seamus Fernandez even said in a December research note: "Most investors and analysts have written off Zydelig."
What it Means for Gilead
Gilead has a lot counting on its foray into oncology. The biotech giant is best-known for its leading position in the antiviral treatment market for diseases including hepatitis C and HIV. Its HCV drugs, Sovaldi and Harvoni, are two of the world’s fastest-growing medicines promising a cure for the debilitating liver disease in as little as eight weeks. They generated more than $13 billion in sales last year, although most analysts believe the company’s HCV revenue has reached its peak, with a decline predicted this year by Gilead. The company also faces new competition from Merck & Co.'s recently approved HCV option, Zepatier, which has been priced more than 30% below Gilead's drugs, despite similar efficacy and safety profile. The drug-maker’s historical HIV lead is currently threatened by a growing market share of GSK’s HIV franchise. The company’s cancer pipeline includes a JAK inhibitor in Phase 3 trials for pancreatic and gastric cancers, GS-5745 in Phase 3 trial for gastric cancer and Phase 1 trial for solid tumors, along with three other investigational products. However, unless Gilead makes some strategic cancer-based buyouts, it can hardly compete with larger, more established players in the field with its current pipeline.
Stock Valuation
Gilead’s shares rose over 1% on Friday, underperforming the 2.7% gain of the iShares NASDAQ Biotechnology Index (IBB). The stock is down 11.4% year-to-date, while the index has plunged by more than 22.5%.
Safety Issues
The European Medicines Agency (EMA) said on Friday that it has started a review of Zydelig following an increased rate of serious harmful events including deaths, mostly due to infections, in three clinical trials testing the drug in combination with other cancer treatments. The trials enrolled patients with chronic lymphocytic leukemia (CLL) and indolent non-Hodgkin lymphoma — Zydelig’s approved indications in Europe. However, EMA noted that the CLL study investigated currently unapproved drug combinations, while the lymphoma study involved patients with disease conditions not covered by the drug’s label.
“EMA will now review the data from these studies to assess whether the findings have any consequences for the authorized uses of Zydelig. In the meantime, patients starting or on treatment with Zydelig should be carefully monitored for signs of infections. If Zydelig is well tolerated, treatment should not be stopped,” the agency posted on its website.
The Food and Drug Administration (FDA), at the same time, is “aware of and is looking into reports of deaths” in the Zydelig trials, spokeswoman Angela Stark said in an emailed statement. “The safety of patients is a top priority and the FDA will communicate new safety-related information on Zydelig as it becomes available,” she added. In the US, the drug is cleared to treat relapsed CLL in combination with Roche’s Rituxan, as well as relapsed follicular B-cell non-Hodgkin lymphoma and relapsed small lymphocytic lymphoma, another form of non-Hodgkin lymphoma.
Gilead was also testing the drug as first-line therapy in CLL patients and in patients with indolent non-Hodgkin lymphoma after other therapies or as the first drug. According to Bloomberg, company spokesperson Sonia Choi said on Friday that these studies will be terminated while the drug is under review. She also said Gilead continues to believe in Zydelig’s efficacy in treating relapsed forms of both cancers.
Little Hope forZydelig?
Gilead launched Zydelig around the same time when several other potential blockbuster cancer drugs were making their way to the market. In November 2013, the FDA approved Gazyva, Roche’s follow-up to aging best-seller Rituxan. In February the next year, Imbruvica from AbbVie and partner Johnson and Johnson won the FDA’s green signal. AbbVie CEO Richard Gonzalez expects the drug to pull in $7 billion in peak annual revenue for the company. As per Evercore ISI analyst Mark Schoenebaum, AbbVie’s estimate puts combined annual sales from the drug at around $11.5-12 billion. Last week, the FDA cleared Imbruvica for front-line use against CLL, making it the first chemotherapy-free option for patients suffering from the disease. In April 2014, the FDA also expanded the use of GlaxoSmithKline’s Arzerra to previously untreated CLL, in combination with a common chemotherapy drug.
Hence, Zydelig’s entry into the market has already been overshadowed by multiple other leukemia launches. The drug pulled in barely $132 million in sales last year, although Bloomberg estimate points to some $821 million of revenue by 2020. The drug already carries a black-box warning indicating major risks, including possibly fatal liver complications. Leerink Partners analysts Michael Schmidt and Seamus Fernandez even said in a December research note: "Most investors and analysts have written off Zydelig."
What it Means for Gilead
Gilead has a lot counting on its foray into oncology. The biotech giant is best-known for its leading position in the antiviral treatment market for diseases including hepatitis C and HIV. Its HCV drugs, Sovaldi and Harvoni, are two of the world’s fastest-growing medicines promising a cure for the debilitating liver disease in as little as eight weeks. They generated more than $13 billion in sales last year, although most analysts believe the company’s HCV revenue has reached its peak, with a decline predicted this year by Gilead. The company also faces new competition from Merck & Co.'s recently approved HCV option, Zepatier, which has been priced more than 30% below Gilead's drugs, despite similar efficacy and safety profile. The drug-maker’s historical HIV lead is currently threatened by a growing market share of GSK’s HIV franchise. The company’s cancer pipeline includes a JAK inhibitor in Phase 3 trials for pancreatic and gastric cancers, GS-5745 in Phase 3 trial for gastric cancer and Phase 1 trial for solid tumors, along with three other investigational products. However, unless Gilead makes some strategic cancer-based buyouts, it can hardly compete with larger, more established players in the field with its current pipeline.
Stock Valuation
Gilead’s shares rose over 1% on Friday, underperforming the 2.7% gain of the iShares NASDAQ Biotechnology Index (IBB). The stock is down 11.4% year-to-date, while the index has plunged by more than 22.5%.
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