Gilead’s Covid-19 treatment Veklury props up first quarter gains amid $2.7B Trodelvy writedown
Gilead got a sales boost from its Covid-19 treatment for the first quarter — to the tune of $1.5 billion. The likely temporary bump came just in time though as Gilead reassessed its cancer drug Trodelvy’s value and took a $2.7 billion R&D impairment charge.
The anticipated reckoning for Trodelvy came after a Phase III readout last month that met its primary endpoint, but left analysts questioning the lack of details. Gilead acquired the drug through its $21 billion deal for Immunomedics in 2020 with the hopes of shaking up the standard of care for triple-negative breast cancer.
“While no final decisions have been made pending discussions with regulatory authorities, as a result of the (March readout) data, we have taken a $2.7 billion impairment to reflect the likelihood of a delayed launch of Trodelvy for third line plus HR+/HER2- breast cancer in the United States and Europe, and the possibility of a reduced market share in lateline patients given the emerging competitive landscape,” Gilead’s chief financial officer Andrew Dickinson explained.
He cushioned the blow with the caveat that the initial value of the Trodelvy was calculated on a potential four indications, even though Gilead “knew” there were more potential indications. As he pointed out, Gilead is continuing to explore opportunities in prostate, endometrial and solid tumor cancers as well as with combinations, for a total of 13 Trodelvy programs set to launch through 2023. Trodelvy notched $146 million in Q1 sales for its current breast cancer and bladder cancer indications.
“We remain confident Trodelvy will deliver an attractive return for shareholders over time,” Dickinson said.
Meanwhile, Gilead did post a strong first quarter in Veklury sales. However, the $1.5 billion pop was tinged with uncertainty as well amid the dropoff in the number of people hospitalized with Covid — which as Dickinson noted is fortunate. It also puts Gilead in a wait-and-see mode for future sales. Gilead plans to monitor demand through the second quarter and evaluate Veklury full-year guidance then, the CFO said.
Veklury had picked up a new FDA approval on Monday for pediatric use in babies at least 28 days old and weighing at least 7 pounds. Chief commercial officer Johanna Mercier said that nod highlighted Gilead’s commitment to extend the reach of the treatment wherever it can, although she also noted the pharma does not expect another Covid surge in the US this year.
The Veklury sales heaped on top of increased HIV med Biktarvy sales of $2.2 billion for the first quarter, an jump of 18% year over year.
In the HIV pipeline, Gilead chief medical officer Merdad Parsey addressed its recent rejection letter for potential first-in-class lenacapavir, pointing out as previously reported that the problem regarded the proposed container vials, not the drug itself. Gilead is talking to the FDA about an alternative vial and will resubmit its NDA, which had been granted priority review, as soon as it resolves the issue, he said.
In other Covid treatment news, Gilead is continuing its Phase I investigation for its oral Covid-19 antiviral GS-5245, CEO Daniel O’Day said, with results potentially leading to a registrational trial. When pressed by an analyst about why Gilead isn’t moving faster on the treatment, comparing it to Pfizer’s Paxlovid and Merck’s molnupiravir, O’Day countered that it is “absolutely moving with tremendous focus and speed,” and leaning on its experience with the trials and FDA regulatory moves for Veklury, then known as remidisivir before its approval.