Gilead Sciences (NASDAQ: GILD) delivered some good news for its investors on Tuesday. The big biotech, along with its smaller partner, Galapagos (NASDAQ: GLPG), announced positive results from a phase 3 clinical study evaluating filgotinib in treating rheumatoid arthritis. Gilead's share price got a nice bump from the news, while Galapagos stock skyrocketed.
The timing of the phase 3 update turned out to be really great. CEO John Milligan and CFO Robin Washington, along with John McHutchison, the biotech's chief scientific officer and head of research and development, fielded questions on Wednesday at the Morgan Stanley Healthcare Conference. Here are three things you'll want to know from what the executives said about what's next for Gilead after the latest clinical success.
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1. Filgotinib: bigger news to come
As you might expect, Milligan and McHutchison spoke a lot about filgotinib. McHutchison stated that the phase 3 results for the immunology drug were what the company expected to see. He noted that the efficacy of filgotinib "was as good [as] or better" than other JAK inhibitors.
The safety profile of filgotinib also looked good. Gilead reported on Tuesday that most adverse events were mild or moderate in severity. Most important, the company said there "were no deaths, malignancies, gastrointestinal perforations, or opportunistic infections, including active tuberculosis," and that no cases of deep venous thrombosis (DVT) or pulmonary embolism (PE) were reported in the study.
However, McHutchison noted that this study was the smallest of the three late-stage studies of filgotinib in treating rheumatoid arthritis. He said Gilead will feel more confident after getting the safety results from the two larger studies, which are expected to read out in the first half of 2019. If all goes well with these studies, Gilead could be well on its way to launching its first blockbuster in the immunology space.
2. HIV: still a huge priority
Practically the first words out of Milligan's mouth at the Morgan Stanley conference related to the successful launch of Gilead's new HIV drug, Biktarvy. Milligan reaffirmed what the company's executives have stated in the past: Biktarvy is probably the last HIV pill from Gilead. The biotech's team doesn't think there's much room to improve on Biktarvy's efficacy and safety profile.
Milligan was quick to add, however, that Gilead isn't "just going to walk away" from HIV. The biotech sees opportunities for meeting unmet needs for HIV patients who are resistant to Biktarvy. Milligan said Gilead is also becoming "more and more enamored" of the potential for an effective long-acting injectable.
What about competition from GlaxoSmithKline (NYSE: GSK), which has high hopes for its doublet therapy? Milligan replied that Gilead doesn't see GSK's HIV combo as a significant threat. He doesn't believe physicians or patients will prefer the doublet regimen over Biktarvy. As for the HIV injection GSK is developing, Milligan doesn't view it as a competitive threat for Gilead, either. However, he noted that it's "a really interesting demonstration that [long-acting injectables for HIV] might work."
3. NASH: potentially two products on the way
Interest is beginning to really percolate in what could be a $35 billion market for drugmakers -- treating nonalcoholic steatohepatitis (NASH). John McHutchison stated that Gilead's NASH strategy focuses on the patients with the most advanced cases of liver disease, because the clinical benefit for therapies will be greatest for these patients.
The company's lead NASH candidate, selonsertib, is currently in a late-stage study. Gilead is likely to report results from this study in early 2019. McHutchison predicted that the ASK1 inhibitor could become the first drug to win approval for treating NASH.
Gilead could follow up with another NASH product not too long after selonsertib. McHutchison said the biotech is evaluating combinations including its two other NASH drugs, FXR agonist GS-9674 and ACC inhibitor GS-0976. He was hopeful that one of the combos being studied will ultimately advance to a phase 3 clinical trial.
A change at the top
There was also one other topic discussed about what's next for Gilead. The Morgan Stanley conference was Milligan's last investor conference as the company's CEO. Milligan announced in July that he's leaving Gilead at the end of 2018.
Milligan noted that he was the 32nd employee for Gilead Sciences and that he spent his entire career of 29 years with the company. Who might follow in his footsteps? Milligan didn't provide any real hints, but he did say there has been "great interest" among candidates with experience as a CEO.
He went on to add that Gilead is "not a broken entity." Milligan stated that Gilead has "a great team, a great pipeline, a lot of capital, and a semi-willing CFO willing to let you deploy it." His last remark generated chuckles from the audience and from CFO Washington.
All kidding aside, though, Milligan does appear to be leaving Gilead in good shape for the next CEO. The potential for filgotinib, the biotech's strong HIV program, and a strong NASH pipeline back up that view.
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