Es­ti­mat­ing a US price tag of $5K per course, remde­sivir is set to make bil­lions for Gilead, says key an­a­lyst

Da­ta on remde­sivir — the first drug shown to ben­e­fit Covid-19 pa­tients in a ran­dom­ized, con­trolled tri­al set­ting — may be murky, but its mak­er Gilead could reap bil­lions from the sales of the failed Ebo­la ther­a­py, ac­cord­ing to an es­ti­mate by a promi­nent Wall Street an­a­lyst. How­ev­er, the fore­cast, which is based on a $5,000-per-course US price tag, trig­gered the ire of one top drug price ex­pert.

Ge­of­frey Porges

Gilead has been ret­i­cent about its pric­ing plans, with com­pa­ny chief Dan O’Day em­pha­siz­ing the need for the com­pa­ny to be re­spon­si­ble. “I don’t think there is a prece­dent for this,” he said in re­sponse to the ques­tion posed by SVB Leerink an­a­lyst Ge­of­frey Porges in a post-earn­ings con­fer­ence call last month. “There is no rule book 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.”

But on Wednes­day, Porges said he ex­pect­ed the drug to car­ry a list price of $5000 per course in the Unit­ed States, above the cost-ef­fec­tive es­ti­mate of $4,500 gen­er­at­ed by ICER, an in­creas­ing­ly in­flu­en­tial watch­dog that typ­i­cal­ly fa­vors a con­ser­v­a­tive ap­proach to pric­ing based on an in­ter­ven­tion’s ben­e­fit be­yond the stan­dard-of-care.

Al­though Remde­sivir is the on­ly ther­a­py so far to show a sta­tis­ti­cal­ly sig­nif­i­cant im­pact in help­ing hos­pi­tal­ized Covid-19 pa­tients with mod­er­ate-to-se­vere dis­ease re­cov­er faster (by four days) in a ran­dom­ized, place­bo-con­trolled study — the gold-stan­dard for ben­e­fit-risk cal­cu­la­tions — it is by no means a sil­ver bul­let. The drug, which thwarts an en­zyme the virus re­lies on to repli­cate, did not re­duce the rate of mor­tal­i­ty by a sta­tis­ti­cal­ly sig­nif­i­cant ex­tent in the tri­al.

ICER broke its usu­al prac­tices in ear­ly May to con­duct its own analy­sis based on ‘raw and im­ma­ture da­ta’ to come up with two dif­fer­ent ways to rea­son­ably price for the drug. The first, the ‘cost re­cov­ery’ mod­el in which the man­u­fac­tur­er prices the ther­a­py on the ba­sis of the min­i­mum costs of pro­duc­tion, chalked up a price of $10 for a 10-day course. (Al­though da­ta from a Gilead tri­al sug­gest a 5-day reg­i­men of the drug is as ef­fec­tive as the 10-day course).

But un­der the tra­di­tion­al cost-ef­fec­tive­ness mod­el, which looks at in­cre­men­tal health ben­e­fits and costs with­in the health sys­tem, the com­pa­ny would be jus­ti­fied to sell the same reg­i­men for $4,500, ICER sug­gest­ed in a draft re­port.

Michael Car­rie Rut­gers Uni­ver­si­ty

Michael Car­ri­er, a Rut­gers Uni­ver­si­ty law school pro­fes­sor who spe­cial­izes in in­tel­lec­tu­al prop­er­ty, in a pre­vi­ous in­ter­view with End­points News not­ed that there isn’t any sim­ple for­mu­la to cal­cu­late the ide­al price of a ther­a­py. “Just psy­cho­log­i­cal­ly, a cost or price be­low $1,000 seems to be more af­ford­able. I don’t think it’s go­ing to be $10. I don’t think it’ll be close to $4500.”

“Wall Street ex­pect­ing $GILD to ex­tract max­i­mum rev­enue ex­ceed­ing treat­ment val­ue.  No one should be sur­prised by this,” said Pe­ter Bach, the di­rec­tor of Memo­r­i­al Sloan Ket­ter­ing’s Cen­ter for health pol­i­cy and out­comes, in re­sponse to Porges’ es­ti­mate of $5,000-per-course on Twit­ter.

Gilead rose to promi­nence by vault­ing HIV to the ranks of a chron­ic dis­ease and as the pur­vey­or of im­pos­si­bly high-priced, but fan­tas­ti­cal­ly ef­fec­tive, he­pati­tis C drugs. Orig­i­nal­ly priced at $1000 per hep C pill, the US drug­mak­er drew the wrath of law­mak­ers and pol­i­cy­mak­ers at home and abroad, and as a re­sult of in­tense scruti­ny and emerg­ing com­pe­ti­tion, prices were re­vised down­wards.

Porges, on Wednes­day, es­ti­mat­ed the drug will be priced at $4000 per course in Eu­rope and $2000 for the same reg­i­men in oth­er mar­kets. Over­all, the fore­cast glob­al remde­sivir sales is $1.9 bil­lion by the end of this year, jump­ing to $6.7 bil­lion in 2021 (bol­stered by gov­ern­ment stock­pil­ing) and then in a range of $5.8 to $6.9 bil­lion in lat­er years.

Pe­ter Bach

“This fore­cast has more un­cer­tain­ty than any that we have pub­lished in the last 15 years, but it re­flects our view that remde­sivir works, it saves med­ical and so­ci­etal costs by short­en­ing dis­ease du­ra­tion and re­duc­ing sever­i­ty, and we be­lieve that Gilead will be per­mit­ted to cap­ture re­duced but still re­al prof­itabil­i­ty from the prod­uct,” he wrote. “We al­so be­lieve that SARS-nCoV2 (the virus be­hind Covid-19) is not go­ing away, or be­ing elim­i­nat­ed by vac­ci­na­tion (we do fore­cast grad­ual adop­tion of vac­ci­na­tion, but in our view that is un­like­ly to stop gov­ern­ment stock­pil­ing of remde­sivir).”

Len Yaffe, a for­mer sell-side med­ical an­a­lyst who now works with a health­care hedge fund called Stoc*Doc Part­ners, said he does not see the US da­ta on hos­pi­tal­ized/in ICU/on ven­ti­la­tor pa­tients sup­port Porges’ rev­enue pro­jec­tions.

“I ex­pect the num­ber of dai­ly new cas­es to drop sig­nif­i­cant­ly by Sep­tem­ber from the cur­rent run rate of 20,000 to un­der 10,000 — by the late fall, there should be drugs ef­fec­tive in ear­li­er treat­ment that would min­i­mize the mod­er­ate to se­vere­ly ill pa­tient group,” he told End­points. “So, if I am wrong, and there is a sig­nif­i­cant sec­ond wave ( I ex­pect a mi­nor one) this win­ter, then he (Porges) could be cor­rect…but I think he needs to base his case on the pos­si­ble in­tro­duc­tion of oth­er phar­ma­ceu­ti­cals, a new case pro­jec­tion (not just that the virus is “not go­ing away”), and not on grad­ual adop­tion of vac­ci­na­tion.”

Porges’ fore­cast is cer­tain­ly gen­er­ous, but the da­ta on the drug are less than stel­lar. On­ly days ago, Gilead un­veiled da­ta from an open-la­bel late-stage study that gen­er­at­ed more ques­tions than an­swers on the mag­ni­tude of remde­sivir’s ben­e­fit in the treat­ment of Covid-19. In this tri­al, pa­tients clas­si­fied as hav­ing mod­er­ate dis­ease were 65% more like­ly to show “clin­i­cal im­prove­ment” on a five-day reg­i­men com­pared to those giv­en stan­dard-of-care — but not those on the 10-day course.

The di­choto­my per­plexed Baird an­a­lyst Bri­an Sko­r­ney. The da­ta “con­tin­ue to in­di­cate a very mar­gin­al clin­i­cal ben­e­fit, while re­in­forc­ing that a ben­e­fit is like­ly more than ran­dom noise,” he wrote in a note. “We con­tin­ue to be­lieve that both the com­mer­cial op­por­tu­ni­ty for Gilead and the macro ben­e­fit of remde­sivir to so­ci­ety, at large, is very lim­it­ed.”

Gilead, mean­while, has al­ready do­nat­ed 200,000 course sup­ply of remde­sivir to gov­ern­ments, in­vest­ed $50 mil­lion in de­vel­op­ing the drug, and ex­pects to spend an­oth­er $1 bil­lion as it ramps up fur­ther de­vel­op­ment and man­u­fac­tur­ing of remde­sivir. The com­pa­ny plans to dis­close its pric­ing plans in the com­ing weeks and kick off com­mer­cial sales in the sec­ond half of this year.

Stock­pil­ing could be­gin in late 2021, af­ter drug pro­duc­tion has been amped up, Porges said. “We as­sume that peak prof­itabil­i­ty (op­er­at­ing mar­gin) for remde­sivir is 19% in 2021, and then de­clines as more and more rev­enue comes from heav­i­ly dis­count­ed (80%+) gov­ern­ment stock­pil­ing pur­chas­es. As a re­sult of the much low­er prof­itabil­i­ty com­pared to Gilead’s core busi­ness, the in­cre­men­tal prof­it con­tri­bu­tion is rel­a­tive­ly small (+2% in 2020, +10% in 2021 and then +1-4% in lat­er years).”

In the Unit­ed States, days af­ter topline da­ta on the drug were an­nounced by the NIH, the FDA is­sued a quick emer­gency use au­tho­riza­tion (a tem­po­rary move to al­low ac­cess to the drug while its mak­er gath­ers more da­ta in or­der to pur­sue stan­dard ap­proval). In the Eu­ro­pean Union, the med­i­cines reg­u­la­tor has rec­om­mend­ed ex­pand­ing com­pas­sion­ate use of remde­sivir in se­vere Covid-19 pa­tients, while a rolling re­view of the drug is on­go­ing. In the UK, the Gilead has struck a deal with the gov­ern­ment to sup­ply the drug for cer­tain Covid-19 pa­tients.

So­cial im­age: Daniel O’Day, AP Im­ages

Donald and Melania Trump watch the smoke of fireworks from the South Lawn of the White House on July 4, 2020 (via Getty)

Which drug de­vel­op­ers of­fer Trump a quick, game-chang­ing ‘so­lu­tion’ as the pan­dem­ic roars back? Eli Lil­ly and Ab­Cellera look to break out of the pack

We are unleashing our nation’s scientific brilliance and will likely have a therapeutic and/or vaccine solution long before the end of the year.

— Donald Trump, July 4

Next week administration officials plan to promote a new study they say shows promising results on therapeutics, the officials said. They wouldn’t describe the study in any further detail because, they said, its disclosure would be “market-moving.”

— NBC News, July 3

Something’s cooking. And it’s not just July 4 leftovers involving stale buns and uneaten hot dogs.

Over the long weekend observers picked up signs that the focus in the Trump administration may swiftly shift from the bright spotlight on vaccines being promised this fall, around the time of the election, to include drugs that could possibly keep patients out of the hospital and take the political sting out of the soaring Covid-19 numbers causing embarrassment in states that swiftly reopened — as Trump cheered along.

So far, Gilead has been the chief beneficiary of the drive on drugs, swiftly offering enough early data to get remdesivir an emergency authorization and into the hands of the US government. But their drug, while helpful in cutting stays, is known for a limited, modest effect. And that won’t tamp down on the hurricane of criticism that’s been tearing at the White House, and buffeting the president’s most stalwart core defenders as the economy suffers.

We’ve had positive early-stage vaccine data, most recently from Pfizer and BioNTech, playing catchup on an mRNA race led by Moderna — where every little sign of potential trouble is magnified into a lethal threat, just as every advance excites a frenzy of support. But that race still has months to play out, with more Phase I data due ahead of the mid-stage numbers looming ahead. A vaccine may not be available in large enough quantities until well into 2021, which is still wildly ambitious.

So what about a drug solution?

Trump’s initial support for a panacea focused on hydroxychloroquine. But that fizzled in the face of data underscoring its ineffectiveness — killing trials that aren’t likely to be restarted because of a recent population-based study offering some support. And there are a number of existing drugs being repurposed to see how they help hospitalized patients.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Elias Zerhouni (Photo by Vincent Isore/IP3/Getty Images)

Elias Zer­houni dis­cuss­es ‘am­a­teur hour’ in DC, the de­struc­tion of in­fec­tious dis­ease R&D and how we need to prep for the next time

Elias Zerhouni favors blunt talk, and in a recent discussion with NPR, the ex-Sanofi R&D and ex-NIH chief had some tough points to make regarding the pandemic response.

Rather than interpret them, I thought it would be best to provide snippets straight from the interview.

On the Trump administration response:

It was basically amateur hour. There is no central concept of operations for preparedness, for pandemics, period. This administration doesn’t want to or has no concept of what it takes to protect the American people and the world because it is codependent. You can’t close your borders and say, “OK, we’re going to be safe.” You’re not going to be able to do that in this world. So it’s a lack of vision, basically just a lack of understanding, of what it takes to protect the American people.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,700+ biopharma pros reading Endpoints daily — and it's free.

Tesla and SpaceX founder Elon Musk gestures to the audience after being recognized by President Trump following the successful launch of a Falcon 9 rocket at the Kennedy Space Center. (via Getty Images)

Tes­la chief Elon Musk teams up with Covid-19 play­er Cure­Vac to build 'R­NA mi­cro­fac­to­ries'

Elon Musk has joined the global tech crusade now underway to revolutionize vaccine manufacturing — now aimed at delivering billions of doses of a new mRNA vaccine to fight Covid-19. And he’s cutting right to the front.

In a late-night tweet Wednesday, the Tesla chief announced:

Tesla, as a side project, is building RNA microfactories for CureVac & possibly others.

That’s not a lot to go on. But the tweet comes a year after Tesla’s German division in Grohmann and CureVac filed a patent on a “bioreactor for RNA in vitro transcription, a method for RNA in vitro transcription, a module for transcribing DNA into RNA and an automated apparatus for RNA manufacturing.” CureVac, in the meantime, has discussed a variety of plans to build microfactories that can speed up the whole process for a global supply chain.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,700+ biopharma pros reading Endpoints daily — and it's free.

Sec­ond death trig­gers hold on Astel­las' $3B gene ther­a­py biotech's lead pro­gram, rais­ing fresh con­cerns about AAV

Seven months after Astellas shelled out $3 billion to acquire the gene therapy player Audentes, the biotech company’s lead program has been put on hold following the death of 2 patients taking a high dose of their treatment. And there was another serious adverse event recorded in the study as well, with a total of 3 “older” patients in the study affected.

The incidents are derailing plans to file for a near-term approval, which had been expected right about now.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,700+ biopharma pros reading Endpoints daily — and it's free.

George Yancopoulos (Regeneron)

UP­DAT­ED: Re­gen­eron co-founder George Yan­copou­los of­fers a com­bat­ive de­fense of the po­lice at a high school com­mence­ment. It didn’t go well

Typically, the commencement speech at Yorktown Central School District in Westchester — like most high schools — is an opportunity to encourage students to face the future with confidence and hope. Regeneron president and co-founder George Yancopoulos, though, went a different route.

In a fiery speech, the outspoken billionaire defended the police against the “prejudice and bias against law enforcement” that has erupted around the country in street protests from coast to coast. And for many who attended the commencement, Yancopoulos struck the wrong note at the wrong time, especially when he combatively challenged someone for interrupting his speech with a honk for “another act of cowardness.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,700+ biopharma pros reading Endpoints daily — and it's free.

Pfiz­er shares surge on pos­i­tive im­pact of their mR­NA Covid-19 vac­cine — part­nered with BioN­Tech — in an ear­ly-stage study

Pfizer and their partners at the mRNA specialist BioNTech have published the first glimpse of biomarker data from an early-stage study spotlighting the “robust immunogenicity” triggered by their Covid-19 vaccine, which is one of the leaders in the race to vanquish the global pandemic.

Researchers selected 45 healthy volunteers 18-55 years of age for the study. They were randomized to receive 2 doses, separated by 21 days, of 10 µg, 30 µg, or 100 µg of BNT162b1, “a lipid nanoparticle-formulated, nucleoside-modified, mRNA vaccine that encodes trimerized SARS-CoV-2 spike glycoprotein RBD.” Their responses were compared against the effect of a natural, presumably protective defense offered by a regular infection.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,700+ biopharma pros reading Endpoints daily — and it's free.

An ex­pe­ri­enced biotech is stitched to­geth­er from transpa­cif­ic parts, with 265 staffers and a fo­cus on ‘new bi­ol­o­gy’

Over the past few years, different teams at a pair of US-based biotechs and in labs in Japan have labored to piece together a group of cancer drug programs, sharing a single corporate umbrella with research colleagues in Japan. But now their far-flung operations have been knit together into a single unit, creating a pipeline with 10 cancer drug development programs — going from early-stage right into Phase III — and a host of discovery projects managed by a collective staff of some 265 people.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,700+ biopharma pros reading Endpoints daily — and it's free.

New stan­dard of care? FDA hands Pfiz­er, Mer­ck KGaA an OK for Baven­cio in blad­der can­cer

The breakthrough therapy designation Pfizer and Merck KGaA notched for Bavencio in bladder cancer has quickly paved way for a full approval.

The PD-L1 drug is now sanctioned as a first-line maintenance treatment for patients with locally advanced or metastatic urothelial carcinoma, applicable in cases where cancer hasn’t progressed after platinum-containing chemotherapy.

Petros Grivas, the principal investigator of the supporting Phase III JAVELIN Bladder 100, called the approval “one of the most significant advances in the treatment paradigm in this setting in 30 years.”

Covid-19 roundup: Vac­cines will need to beat place­bo by 50% to qual­i­fy for FDA OK; UK tri­al drops Kale­tra

The FDA will set the bar for approving a Covid-19 vaccine at 50% efficacy, the Wall Street Journal reported, meaning any successful candidate will have to reduce the risk of coronavirus disease by at least half compared to placebo.

That requirement is part of guidance that the agency is set to release later today, laying out detailed criteria for vaccine developers — some of whom are eyeing an OK by the end of the year, in line with expectations at Operation Warp Speed.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 84,700+ biopharma pros reading Endpoints daily — and it's free.