September 16, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Gilead Sciences has everybody’s attention although not necessarily in a positive way. Despite it being a dominant player in hepatitis C (HCV), with Sovaldi, Harvoni, and Epclusa, as well as in the HIV/AIDS market, company stock has been weak, losing more than 35 percent in value since June 2015. This is largely on the basis of slowing HCV sales and concerns over patent expirations. This has led analysts and investors to alternate between speculating on which company should buy Gilead, or what companies Gilead should buy to bolster its market value.
TheStreet today suggested today that everybody should take a hard look at Gilead’s pipeline. It’s apparently something Gilead executives have been encouraging investors to do at a number of healthcare conferences in New York and Boston. It hasn’t always been met with much interest.
TheStreet writes, “M&A is sexy. It’s also the fastest way to rev up growth. Hearing a big company like Gilead talk about drugs in Phase II studies is a tad boring and the payoff is still years away.”
That said, Gilead plans to announce data from nine clinical trials between now and the end of the year. Those nine trials involve five different drugs in six diseases, none of which are hepatitis C or HIV.
The company is holding two different Phase II trials of simtuzumab in patients with nonalcoholic steatohepatitis (NASH), otherwise called fatty liver disease. In addition, Gilead is studying simtuzumab in another Phase II study in patients with primary sclerosing cholangitis (PSC), a chronic liver disease that affects the bile ducts.
Also, the company is studying GS-4997, an ASK-1 inhibitor in NASH patients. The patients will be treated with GS-4997 alone or in combination with simtuzumab.
Gilead is also conducting two Phase III trials of its JAK inhibitor momelotinib in myelofibrosis patients. One compared the drug to Incyte’s JAK inhibitor Jakafi. The second trial uses other therapeutics as a control group.
And finally, Gilead is running a Phase II study of GS-5745 in Crohn’s disease, a study of GS-4997 in diabetic kidney disease, and a study of ventricular tachycardia with eleclazine.
Adam Feuerstein, writing for TheStreet, says, “Individually, none of these study results are likely to have a significant impact on Gilead’s stock price. Collectively, the data will give investors a clearer measure of Gilead’s internal drug development efforts, outside of its core hepatitis C and HIV strengths.”
Despite—or because—of these contradictions, a company with dominant positions, a healthy pipeline and a weak stock, investors don’t seem to know what to do with Gilead. In the last quarter, Highbridge Capital Management and Platinum Investment Management bought up shares of the stock. Omega Advisors and Two Sigma Investments unloaded it.
Keith Speights, writing for The Motley Fool on September 13, said, “You could look at Gilead Sciences as a lost cause and sell the stock like Omega Advisors and Two Sigma Investments. However, I suspect that Highbridge Capital Management and Platinum Investment Management have the better idea. At current valuations, I think investors are getting a bargain on Gilead with its still-impressive earnings, solid new drugs on the market, and promising pipeline. Let Gilead pay you (through dividends and share buybacks) to wait on its pipeline products to blossom.”
