Year Established: 1987
Revenues: $30,390 (-7%)
Net Income: $13,488 (-26%)
R&D: $5,098 (+69%)
TOP SELLING DRUGS
|Harvoni||chronic hepatitis C||$9,081||-34%|
|Sovaldi||chronic hepatitis C||$4,001||-24%|
|Epclusa||chronic hepatitis C||$1,752||n/a|
|Viread||chronic hepatitis B||$1,186||7%|
Despite having lost a portion of its dominant share in the increasingly competitive Hep C market, Gilead only slipped one slot in this year’s rankings to 8. While the company took a hit financially, with revenues down 7% and earnings down 26%, it was expected, and Gilead’s competitors reaped the rewards.
HCV product sales, which consist of Harvoni, Sovaldi and Epclusa were $14.8 billion for the year, compared to $19.1 billion in 2015. Declines were due to lower sales of Harvoni and Sovaldi, partially offset by sales of Epclusa, which was launched in 2016 in various countries.
R&D expenses, which were up a whopping 69% in 2016, increased primarily due to overall clinical costs, including ongoing milestone payments, and Gilead’s purchase of a U.S. FDA priority review voucher. R&D expenses also include up-front collaboration expenses related to Gilead’s license and collaboration agreement with Galapagos NV, purchase of Nimbus Apollo, Inc. and impairment charges related to IPR&D.
Despite key competition and fewer patients, due to the curative nature of its Hep C products, a large untapped market remains and Gilead has been working to build awareness among an estimated 2.5 million baby boomers in the U.S. If Gilead can maintain its market share in this segment, there is still money to be made.
With its multi-billion dollar HCV franchise, Gilead’s closest competitors remain far behind. Even though Merck, AbbVie, and BMS each have HCV drugs for at least one of the six genotypes, their combined sales don’t touch Gilead’s numbers. Additionally, Gilead’s newest pan-genotype drug Epclusa, approved last June, surpassed its competition in 2016 with $1.8 billion in sales, and it should have a strong hold in the near term.
Epclusa represents the first all-oral, pan-genotypic, single tablet regimen for the treatment genotype 1-6 chronic hepatitis C virus (HCV) infection. It’s also the first single tablet regimen approved for the treatment of patients with HCV genotype 2 and 3, without the need for ribavirin.
Despite high cure rates and simplified treatment for most HCV patients, those who have failed previous treatment with direct acting antivirals continue to represent an unmet medical need. Study results demonstrate that combining three potent antivirals with different mechanisms of action and high barriers to resistance can provide high cure rates for patients who have failed other highly effective oral DAA regimens.
Gilead’s pending SOF/VEL/VOX fixed-dose combination was granted Breakthrough Therapy designation by the U.S. FDA for the treatment of chronic genotype 1 HCV patients who previously failed an NS5A inhibitor-containing regimen.
Additionally, the European Commission approved Gilead’s Vemlidy (Tenofovir Alafenamide, TAF) for the treatment of Chronic Hepatitis B Virus Infection, which is the first new treatment for chronic hepatitis B to be approved in Europe in nearly a decade.TAF is a targeted prodrug of tenofovir that has demonstrated antiviral efficacy similar to Viread, but at one-tenth the dose. TAF is associated with improved renal and bone lab safety parameters compared to TDF in clinical trials.
Vemlidy was approved by the FDA in November 2016 for the treatment of chronic HBV infection in adults with compensated liver disease, and by the Japanese Ministry of Health, Labour and Welfare in December 2016 for the suppression of viral replication in chronic hepatitis B patients with evidence of hepatitis B virus replication and abnormal liver function.
In the near term, Gilead has decent growth potential. Within the next few years. Bictegravir could significantly boost HIV franchise sales. Bictegravir is a combo alternative integrase inhibitor that would come in single tablet form. GSK’s Tivicay has led the market in this space with its HIV segment up 57% in the first quarter, led by Tivicay sales. Gilead stands to recoup some of the market share it lost in this space once Bictegravir hits the market.
Recent trials demonstrated that Gilead’s bictegravir combination could offer an improvement over existing therapies. In four Phase III studies, bictegravir met its primary objective of non-inferiority. Gilead plans to submit a marketing authorization application for BIC/FTC/TAF in the EU in the third quarter of 2017.
Three of the ongoing studies are designed to explore the safety and efficacy of BIC/FTC/TAF compared to triple-therapy regimens containing dolutegravir in treatment-naïve patients and virologically suppressed patients switching from an existing antiretroviral regimen with dolutegravir. A fourth study in virologically suppressed patients compares switching to BIC/FTC/TAF versus remaining on a suppressive regimen of two nucleoside/nucleotide reverse transcriptase inhibitors and protease inhibitor.
Because people with HIV are living longer and are increasingly likely to be taking medication for other conditions, such as heart and liver disease, they are exposed for longer periods of time to the virus and to the medications used to treat it. Therefore, new, effective treatment options are needed that are also tolerable, and offer convenient dosing.
Helping to fulfill this need, Gilead’s once-daily single tablet regimen Odefsey for the treatment of HIV-1 in certain patients, was granted approval in the EU in June 2016, and in the U.S. in March 2016. Odefsey combines Gilead’s emtricitabine and tenofovir alafenamide (marketed as Descovy) with rilpivirine, marketed by Janssen Sciences Ireland UC, a Johnson & Johnson company. Following the approval of Genvoya in November 2015, Odefsey is Gilead’s second STR based on the Descovy backbone to receive marketing authorization in the EU and is currently the smallest pill of any STR for the treatment of HIV.
Additionally, the European Commission approved Gilead’s once-daily Truvada for reducing the risk of sexually acquired HIV-1. This represents the first antiretroviral medicine to be licensed in Europe for pre-exposure prevention, in combination with safer-sex practices, to reduce the risk of HIV-1 in high risk adults.
To maintain its position in the top 10, Gilead needs a new outlet. So far, its oncology efforts have been challenged. Its only approved oncology asset is idelalisib, marketed as Zydelig, which is a second line therapy with boxed warning in three indications: Relapsed chronic lymphocytic leukemia (CLL), in combination with rituximab, in patients for whom rituximab alone would be considered appropriate therapy due to other co-morbidities; Relapsed follicular B-cell non-Hodgkin lymphoma in patients who have received at least two prior therapies; and Relapsed small lymphocytic lymphoma (SLL) in patients who have received at least two prior therapies. Needless to say, Zydelig hasn’t taken off in the oncology sector as anticipated.
Other oncology pipeline assets include: Andecaliximab, an MMP9 inhibitor currently in Phase III trials in gastric cancer, entospletinib, a SYK inhibitor in Phase II in acute myeloid leukemia, and hematopoietic and lymphoid malignancies; and tirabrutinib, a BTK inhibitor in Phase II for B-cell malignancies, as well as couple candidates in early development.
In November, Gilead achieved top-line results from two Phase III trials (SIMPLIFY 1 and 2) that evaluated momelotinib, an investigational inhibitor of Janus kinase (JAK) compared to ruxolitinib or best alternative therapy (BAT) in myelofibrosis, a relatively rare bone marrow cancer. The SIMPLIFY-1 study achieved its pre-specified primary endpoint of non-inferiority to ruxolitinib for splenic response rate, defined as the percentage of patients experiencing a 35% reduction in spleen volume, but SIMPLIFY-2 failed to achieve its primary endpoint of superiority of momelotinib compared to BAT in patients previously treated with ruxolitinib.
In the “other” category, NASH, or nonalcoholic steatohepatitis, is a therapeutic area being pursued by Gilead, and several other drug developers. Allied Market Research estimates that the global market is expected to reach $1.6 billion by 2020. The high prevalence of Type II diabetes and obesity, which leads to NASH and other nonalcoholic fatty liver diseases, has created this market. North America has the highest rates of NASH and other nonalcoholic fatty liver diseases and Europe ranks second in terms of the prevalence.
Results from a Phase II trial evaluating the investigational apoptosis signal-regulating kinase 1 (ASK1) inhibitor selonsertib alone or in combination with the monoclonal antibody simtuzumab (SIM) in NASH and moderate to severe liver fibrosis, demonstrated regression in fibrosis that was, in parallel, associated with reductions in other measures of liver injury in patients treated with selonsertib.
While competition for Gilead’s top franchises took its toll in 2016, HCV and HIV assets moving through the pipeline are likely to put this antiviral authority back on top—remaining there may prove more difficult. A breakthrough product in oncology, cell therapy, or NASH is needed in the long term.