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Within weeks of its acquisition of Kite, Gilead is working to launch its first immuno-oncology drug, with a goal of training 70-90 US cancer centers. Q3 saw continued increase in HIV sales, decrease in HCV revenues.

 

 

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With the US approval of CAR-T therapy Yescarta (axicabtagene ciloleucel) coming within weeks of the closing of its $11.9bn acquisition of Kite Pharma Inc., Gilead Sciences Inc. used its third quarter earnings call to highlight the progress already being made on its first immuno-oncology launch.

 

 

Gilead execs outlined the early days following the approval of Yescarta and the closing of its purchase of Kite. (Also see "Kite's Gene Therapy Yescarta Gets Biosimilar Treatment With Second-In-Class Approval" - Scrip, 19 Oct, 2017.) Sixteen cancer centers are now completing training for safe use of the drug and the company is working toward an ultimate goal of 70 to 90 US cancer centers qualified to administer it.

 

 

The Foster City, Calif.-based firm reported aggregate product sales of $6.4bn during its third quarter 2017 earnings call on Oct. 26, down 14% year-over-year and 9% sequentially, caused largely by declining sales of its hepatitis C franchise but partially offset by rising sales for its new HIV combination products comprising tenofovir alafenamide (TAF).

 

 

Yescarta obtained FDA approval Oct. 18 – six weeks ahead of its user fee date – to treat relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, and announced pricing that could undercut the first approved chimeric antigen receptor T-cell (CAR-T) therapy, Novartis AG’s Kymriah (tisagenlecleucel). (Also see "Gilead/Kite Pricing For Yescarta Undercuts Novartis's CAR-T Kymriah" - Scrip, 18 Oct, 2017.)

 

 

Gilead CEO John Milligan said the first task in launching Gilead’s initial immuno-oncology drug is training cancer centers to comply with Yescarta’s Risk Evaluation and Mitigation Strategy (REMS).

 

 

“The Kite team has begun collaborating with academic cancer centers to finalize training and complete certification,” Milligan said. “But first, 13 centers are expected to be approved in about two weeks and each center will be able to accept patients for Yescarta treatment as soon as the approval is received.”

 

 

Gilead and Kite are planning a controlled launch to ensure patient safety, because therapy with the CD19-directed genetically modified autologous T-cell immunotherapy is complicated and can be associated with severe side effects, he added.

 

 

The initial certification effort is focused on 16 cancer centers in 13 states, Jim Meyers, EVP of commercial operations, told the call. The longer-term goal is to train between 70 and 90 cancer centers to administer the product, he said.

 

 

“Yescarta is a transformational therapy for patients who have run out of options and are waiting for a new treatment to help them in their fight against cancer,” Milligan said. The current standard of care in diffuse large B-cell lymphoma historically enables only a small percentage of patients to hold off disease progression for six months or more, he added.

 

 

Meyers said Gilead and Kite are also now working to educate payers on the benefits of CAR-T therapy. Gilead’s expectation is that initially the payer base for the drug will be 50% to 60% commercial, with Medicare and Medicaid making up the rest. Eventually, Medicare patients may comprise a third of the drug’s patient base, he said.

 

 

Positive, Negative Sales Trends Continue

Financially, the third quarter continued ongoing trends for Gilead, as TAF-driven sales of its HIV franchise grew and HCV sales declined. (Also see "Gilead Raises HCV Guidance Slightly, Still Mum On M&A" - Scrip, 26 Jul, 2017.) Meyers attributed the HCV downturn to a reduced rate of patient starts and also increased competition, without mentioning AbbVie Inc.’s recently approved second-generation combination therapy Mavyret (glecaprevir/pibrentasvir) by name. (Also see "AbbVie's Mavyret Is First 8-Week Pan-Genotypic Combination For HCV" - Scrip, 3 Aug, 2017.)

 

 

HCV franchise sales totaled nearly $2.2bn during the quarter, down 34% year-over-year and 23% from the previous quarter. In the US, HCV sales came in at $1.4bn on the quarter, down 31% and 26%, respectively. Meyers noted that 39,000 US patients started a Gilead HCV regimen during the third quarter, “down 9% from the prior quarter, continuing the gradual decline in HCV patient starts that we've seen since the beginning of 2017.”

 

 

Meanwhile, non-HCV antiviral sales, including hepatitis B as well as HIV products, added up to more than $3.6bn for the quarter, a 4% uptick year-over-year and 2% higher sequentially. TAF-based regimens now comprise 56% of Gilead’s HIV sales, Meyers pointed out, up from 39% at the start of 2017.

 

 

Jefferies analyst Michael Yee called the quarter relatively mixed but still solid for its longer-term prospects, as it turns to immuno-oncology to revitalize its sales base. “Gilead had low expectations going in and did a little better, which is a relatively good thing as they look to flatten the biz and grow in the future,” the analyst said in an Oct. 26 note.

 

 

M&A Outlook

Gilead also reported that it had $41.4bn cash in hand at the end of the third quarter, prompting the usual questions about the company’s M&A ambitions moving forward. Milligan said the Kite deal came together and closed rapidly, and that Gilead will continue reviewing opportunities. Kite’s technology platform is an asset that Gilead will need to add to over time to keep up with advances in immuno-oncology, he added.

 

 

“When we acquired Kite, we announced the acquisition that we see this as a platform that will require continuous innovation and so we are quite active in bringing in technologies which will help us move this CAR-T [program] forward,” Milligan explained. “Having said that, it's also true that M&A is going to be an ongoing activity at Gilead, where we will be in a constant state of evaluation of opportunities to bring in revenues or technologies that we think will help enhance our portfolio.”

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