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One day after two trials indicated remdesivir offers therapeutic benefit in patients hospitalized for COVID-19 infections, Gilead Sciences Inc.’s first quarter earnings call was dominated by discussion of the antiviral, including how the company might build a commercial business for treating the novel coronavirus.

Gilead did not update its revenue guidance for 2020 on the 30 April call, and said it saw roughly $200m in increased revenue from pandemic-related stocking of its products.

An emergency use authorization from the US Food and Drug Administration for remdesivir is imminently expected. Early data from a US National Institute for Allergy and Infectious Diseases (NIAID) study and a Gilead-sponsored Phase III study of remdesivir in severely ill hospitalized patients, both released 29 April, were promising. Remdesivir, a nucleotide analog initially developed as a potential therapy for Ebola virus, has been the lead possibility for a COVID-19 therapeutic and development is moving fast. (Also see "Remdesivir Potentially Most Effective For Coronavirus: China Investigator" - Scrip, 9 Mar, 2020.)

CEO Daniel O’Day said the company is in ongoing discussions with the FDA about an EUA. But while that is an early measure to get to market as fast as possible, he stressed that Gilead’s ultimate goal for remdesivir is a full approval.

“We'll allocate [the drug] accordingly so as regulatory approvals come online. So yes, it is possible to charge,” the exec said. “I would just say that our goal here is to get a full approval for remdesivir. We feel the data supports that. And an EUA, therefore, is a step to really a more formalized approval. The reason the agency and we are talking about that is that these are extraordinary times, right? So, weeks would make a difference to be able to get medicine to patients.”

O’Day added that while Gilead has donated the current 1.5 million doses of the drug for compassionate use and clinical trials, it could begin charging for remdesivir under an EUA. He did not say whether Gilead would do so.


Business Opportunity From COVID-19 Unclear

O’Day said Gilead will provide details on how to sustainably provide broad access to remdesivir as approvals occur in the future. “We just don't have the answers yet,” he said. “But we deeply respect and appreciate the fact that when we get into millions of doses, we have to have a sustainable economic model that works here and that achieves access to affordability [for] patients around the world.”

The CEO largely punted away a question about whether COVID-19 therapy could be a lucrative business – like HIV or hepatitis C has been – for Gilead if the virus is a global health care issue in the longer term.

One thing he did point out was NIAID director Anthony Fauci’s positive comments on the data so far, and said those comments meant the landscape for treatment of the virus has changed in that other treatments will need to be compared to remdesivir or provide an add-on benefit.

The add-on therapy might be one business model for remdesivir, O’Day indicated. Like HIV treatment developed with therapeutic cocktails around baseline therapy, potentially “remdesivir becomes kind of the base therapy, and one looks to try [for] symptomology improvement, mortality improvements, expanding patient populations. And so that is yet another factor that we'll go into how we determine how best to create a sustainable solution for remdesivir. But clearly, all those things we have been thinking about, and now we have to accelerate now that we have these trial results,” he said.

In response to another question about the business model for remdesivir, O’Day reiterated that “we are conscious of the fact that this [situation] is unique and this is different.” Analysts have drawn parallels to Gilead’s commercial success with HIV and HCV, or to Roche’s flu therapy Tamiflu, but the CEO shrugged those off. “There's been no other time like this in the history of the planet that any of us have been through,” he said. “There is no guidebook out there. There is no rulebook out there other than that we need to be very thoughtful about how we can make sure we provide access [to] our medicine to patients around the globe and do that in a sustainable way for the company.”


A Silver Lining For Pharma’s Reputation

As some other companies have said on recent earnings calls, O’Day did note that the biopharmaceutical industry’s response to the pandemic might be changing the industry’s reputation for the better, saying the tone of discussion in Washington has changed.

“At the end of the day, I think this will certainly help the industry's reputation,” he said. “I think the ability to solve a human crisis like this because of the decades of investment and the at-risk investment that's done by so many companies, people… the general public will see that.”

“I think the tone is different in Washington,” he added. “I think people are very appreciative and concerned about finding solutions here. And it's brought us all together, which I think is a good thing. I'm not suggesting that there won't continue to be focus and pressure on drug pricing. Of course, there will be.” O’Day pledged that Gilead will continue to work toward legislation that reflects the need to bring greater balance to the impact of drug pricing on patients.”

Regarding the pandemic’s impact on Gilead’s business, chief financial officer Andrew Dickinson said any negative impact during the first quarter was modest, while the company also saw stockpiling during the quarter that brought in roughly an additional $200m, particularly in its HIV franchise. In April, however, Gilead has started to see more of an impact on its business as the pandemic has affected behavior throughout the health care sector.

“In HIV, early signals suggest that switches both for treatment and prevention patients may be impacted by COVID-19 as people defer health care visits,” Dickinson said. “Specifically, in April, we are observing reductions in Descovy (emtricitabine/tenofovir alafenamide) for PrEP [pre-exposure prophylaxis] initiations and lower switch volume. PrEP refills may also be affected, but it's still too early to fully understand any trends here. In contrast, our HIV treatment business is less likely to be significantly impacted as we believe patients will continue to prioritize refilling their prescriptions and access their physicians through telemedicine.”


Solid Quarter With HIV, Yescarta Growth Continuing

Overall, Gilead enjoyed a solid first quarter, with product sales of $5.5bn up 5% year-over-year. The HIV franchise grew 14% year-over-year to $4.1bn globally, driven by PrEP in the US and uptake worldwide of Biktarvy (bictegravir/emtricitabine/TAF). Biktarvy totaled $1.69bn in sales in the quarter, more than double the $793m posted in Q1 2019, with US sales of $1.41bn and international sales of $281m. Chimeric antigen receptor T-cell (CAR-T) cancer therapy Yescarta (axicabtagene ciloleucel), meanwhile, brought in $140m during the quarter, up from $96m a year earlier and from $122m in the fourth quarter of 2019. (Also see "Gilead Writes Down Kite Buy As Yescarta Sales Flatten Out" - Scrip, 4 Feb, 2020.)

Multiple analysts noted that Gilead did not adjust its 2020 revenue guidance, saying there are many variables to consider right now between remdesivir-related costs and business potential as well as the pandemic’s impact on overall business.

“Guidance may be unclear due to the financial impacts of remdesivir – i.e., spending on the program to make sure they are prepared for everyone versus no certainty on revenues offset,” Jefferies analyst Michael Yee wrote in a 30 April note. “It may be the case they are taking short-term hits on higher spending (modest) to ramp up remdesivir – at the expense of higher operating expenses and no clear financial benefit.”

“We note that guidance was not explicitly reaffirmed in the earning press release or slides,” Credit Suisse analyst Evan Seigerman said. “Overall, the quarter was fine, but we are concerned that some of the momentum from remdesivir will wane as issues with the business during the pandemic become apparent.”


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