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The Food and Drug Administration on Tuesday rejected Gilead Science’s application for a will-be blockbuster arthritis medicine, blind investors. One analyst called the development a ‘near-worst-case scenario’ and a ‘shock’.
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The Food and Drug Administration’s decision to deny Gilead Science’s application for a wild medicine for blockbuster arthritis announced Tuesday night, blind investors Wednesday morning, shares of a handful of large biopharma companies.
The drug, a so-called JAK inhibitor called filgotinib, was introduced into an important product for Gilead (ticker: GILD). JP Morgan analyst Cory Kasimov wrote Tuesday night that he had previously predicted that the drug would bring $ 2 billion a year in sales to its peak; FactSet consensus estimates have hit the drug by $ 989 million by 2025.
Well, that’s all thrown into question. Gilead said Tuesday night that the agency had issued a so-called complete response letter to the company’s request for filgotinib, saying it wanted data from ongoing studies on the drug’s impact on patients’ sperm counts before making a final decision on took the medicine.
Cowen analyst Phil Nadeau wrote Tuesday night that the development delayed the launch of filgotinib in the US by at least a year.
Gilead’s share was down 3.2% on Wednesday morning, while GIlead’s partner shares on filgotinib, Galapagos (GLPG), were down 24.3%. Shares of AbbVie (ABBV), which sells Rinvoq, a member of the same class of drugs as filgotinib, were up 1.3%, while shares of Pfizer (PFE), which also sells drugs of the same type, were up 0.3%. went up. The S&P 500 was up 0.2%.
In a note from Tuesday night, Kasimov called the development a ‘near-worst-case scenario’ and a ‘shock’.
In addition to questions about the drug’s impact on serum counts, Gilead said the FDA had “expressed concerns” about the risk / benefit profile of a 200 mg dose of the drug.
“The potential lack of dosage flexibility may affect the competitive profile of filgo,” Kasimov wrote. “Furthermore, this gives competitors another year on which to build on their market leadership.”
Rheumatoid arthritis is an enormously competitive indication, given the large patient population. In a note Wednesday, Mizuho analyst Vamil Divan wrote that the FDA letter was a ‘clearly positive’ for AbbVie. He wrote that it was also a positive for Pfizer, which sells a JAK inhibitor called Xeljanz, although he noted that Pfizer is also developing other JAK inhibitors, and said he was wondering “if the filgotinib news investors are more cautious. will discuss the potential for those products in the U.S. market, given various safety concerns the FDA has raised across the wider class. ”
For Galapagos, the European biotech working with Gilead, the picture is particularly relevant. “We remain confident in the clinical profile of filgotinib, but we find regulatory decisions like these very challenging for the disabled,” Cantor Fitzgerald analyst Eliana Merle wrote in a note Wednesday. Merle cut its price target on the Galapagos to $ 134 from $ 192. The stock traded at $ 142.10 on Wednesday morning. They maintain their neutral appreciation.
In a statement Tuesday night, Gilead’s chief medical officer, Dr. Merdad Parsey, who was disappointed with the company but still believes “in the benefit / risk profile of filgotinib in [rheumatoid arthritis]. The chief medical officer of Galapagos, Dr Walid Abi-Saab, said the letter was “very disappointing, considering the robust and comprehensive data package that was provided.”
Write to Josh Nathan-Kazis at [email protected]
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