Just as Gilead $GILD was looking to buoy expectations in its R&D prospects, the big biotech had been hit with a setback on its late-stage pipeline. The company says it’s scrapping a Phase II/III ulcerative colitis study of its anti-MMP9 antibody GS-5745 after tracking insufficient efficacy to keep it in the clinic.
The Data Monitoring Committee made the call after reviewing the experiences of 150 patients in the study, which was supposed to recruit 1,600 patients altogether. Gilead signed off on the decision after agreeing with their conclusion.
Gilead isn’t giving up on the drug. It’s still pursuing a Phase III study of the antibody for gastric cancer, with a combo trial underway with nivolumab as well. Gilead says it will also keep pushing on Crohn’s disease, rheumatoid arthritis and cystic fibrosis. But analysts — most of whom weren’t expecting big things for this drug to begin with — are starting to write off the drug after it flailed in this first late-stage trial.
“Despite these low expectations, the bad news does come as another blow to the sentiment about the company’s R&D prospects and investor sentiment,” noted Leerink’s Geoffrey Porges. “GS-5745 was one of the five proof-of-concept molecules in phase 2 development expected to read-out in H216 that offered opportunity for some offset to Gilead’s increasingly challenged core businesses. While it is still possible that this program could create value in either Crohn’s or gastric cancer, investors are unlikely to give it much credit after this early discontinuation.”
Jefferies’ Brian Abrahams took the news with a grain of salt. He’s turning his attention to other drugs that may prove far more exciting, including filgotinib, momelotinib, GS-9620, bictegravir, simtuzumab and 4997.
Gilead has been turning to some high dollar deals to help maintain investors’ enthusiasm as its gangbuster hep C revenue has begun to fade. Late last year the team at Gilead quickly stepped in to fill AbbVie’s shoes on an autoimmune collaboration with Gapalapagos, paying $725 million upfront to partner on filgotinib. Another $1.35 billion in milestones is on the table.
Gilead’s shares are down slightly in after-market trading.
Some analysts have been clamoring for a major acquisition to help right the ship, which they could easily afford out of their pile of cash reserves, but RBC’s Michael Yee hasn’t detected much desperation among Gilead’s executive crew — yet. Yee also doesn’t expect any kind of corporate split.
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