Gilead (GILD) Looking Even Weaker on the R&D Front as It Racks Up Some More Clinical Failures in Q3 Report
11/2/2016 5:37:33 AM
November 2, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Investors were not particularly happy with Gilead Sciences (GILD)’s third-quarter report yesterday. In addition to sagging sales and revenue, it outlined a laundry list of failed clinical trials.
Gilead reported third-quarter product sales of $7.405 billion, down from $8.211 billion in the same period in 2015. Total revenues were $7.5 billion, down from $8.295 billion in the same periods. Even its HIV and liver diseases area, facing less competition than its Hepatitis C franchise, were down $6.8 billion compared to $7.7 billion in the 2015 third quarter.
HCV products, Harvoni, Sovaldi and Epclusa, brought in $3.3 billion, but that’s down a lot from $4.8 billion in the third quarter of 2015.
John Carroll, writing for Endpoints News, said, “Gilead grimly hung on to simtuzumab after the LOXL2 enzyme blocker flopped in two straight studies. Now the Big Biotech has added several more failures to the roster and put the five-time loser on the shelf for good.”
The company has abandoned GS-5745 for ulcerative colitis and Crohn’s. At the company’s third-quarter conference call, Norbert Bischofberger, the company’s chief science officer, said, “As for GS-5745, an anti-MMP-9 antibody, we stopped a Phase II/III study in patients with ulcerative colitis because of the lack of efficacy. This decision for the planned interim DSMB analysis after the first 150 patients had been enrolled, that the study met pre-defined futility criteria. Also, and not unexpectedly, there was no evidence of benefit of GS-5745 in a Phase II study in patients with Crohn’s disease. Consequently, we will not further pursue GS-5745 for ulcerative colitis or Crohn’s.”
The company’s eleclazine (GS-6615) also failed to meet its primary endpoint in ventricular tachycardia, ventricular fibrillation, or VT/VF, and implanted cadioverter-defibrillators. Bischofberg said, “The primary endpoint was the number of electrical interventions, including shocks and pacing, by the implanted device. And there was no evidence of efficacy of eleclazine compared to placebo. Consequently, we will not develop eleclazine any further for VT/VF. Evaluation in long QT-3 syndrome and in hypertrophic cardiomyopathy is continuing.”
And although most analysts would think this would be a really good time for Gilead to acquire a company to now bolster its pipeline, as well as to give the stock a boost, the company’s chief executive officer, John Milligan, showed no particular signs of it. “We’ve been going through an extensive internal review of programs and opportunities, and an important aspect of our approach is that we remain open-minded, but disciplined. So while we have the balance sheet to execute on multiple opportunities, we will keep the bar high.”
Despite this, with company stock trading at $73.03 compared to a November 9, 2015 price of $108.11, some investors and analysts think it’s a good time to invest in Gilead. Writing for The Motley Fool yesterday, Brian Feroldi noted that, “Perhaps the best reason to stick with Gilead’s stock is because it is dirt cheap.” And despite evidence that its HCV franchise sales have peaked, its HIV franchise is still strong and had a promising pipeline.
And also in The Motley Fool, Keith Speights notes that Gilead has a pile of cash worth somewhere around $24.6 billion. That’s allowed the company to buy back stock and pay dividends. And finally, The Motley Fool’s Cory Renauer recommended patience. “There are no guarantees, but I’m betting Gilead will earn more per share in 10 years than it does today—regardless of whether it buys its own stock or another company to achieve this goal.”
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