Gilead Sciences (GILD) 34th Cowen and Company Healthcare Conference Call March 3, 2014 2:10 PM ET
John Milligan – President and COO
Phil Nadeau – Cowen & Company
Good afternoon and welcome once again to Cowen & Company’s 34 th Annual Healthcare Conference I am Phil Nadeau a Biotech Analyst at Cowen. It’s my pleasure to introduce the next presenting company Gilead. Those of you who follow our research know that we’ve been big Gilead fans for quite some time. We think that the ongoing launch of Sovaldi is just yet another reason to own the stock as we expect that to drive great outperformance of shares. So, we’re really happy to have with us today John Milligan the President and Chief Operating Officer who’ll give a 30 minute talk in this room and then there is a breakout immediately following the task room which just around the corner. John?
Thanks, Phil. Thanks for inviting us here. It’s always a pleasure to visit Boston. It’s always a pleasure to be able to present on behalf of Gilead. And so, I am going to go through a number of things today in our programs and of course, as always, we’ll be making forward-looking statements during the course of this presentation. I advise you to think about the risks associated with our business instructions now that we have our most recent 2013 10-K filed as we go through this presentation, we will be making forward-looking statements and so I advise you to read upon the company.
I just want to talk briefly about Gilead’s commercial portfolio. As you may know, we have a number of products now for the treatment of a variety of different diseases. We are still principally in infectious diseases and principally in anti-viral indications with our now eight products that have been approved for the treatment of HIV.
And in particular our single-table regimens of Atripla, Complera and Stribild and as I go through this presentation, I will give you more details on how those products are performing and why they are such an important part of weaponry against HIV and AIDS.
Phil had mentioned, Sovaldi, Sovaldi is our most recent entering into the field of liver diseases where we also have Viread and Hepsera on the market. Sovaldi is only in its third month since launch. We’ve been on the market about 2.5 months. As it is earlier in the process, I won’t be able to say anything specifically about how the sales are going or any of the patient demographics.
It’s a common series of questions but, as you can imagine, we are just gathering data now on Sovaldi. So we don’t have the hard data that we have for example, in HIV as I go through this. But I will talk about patient demographics for the future as we go through this.
I just want to mention briefly our cardiovascular and respiratory portfolios. We have seen continued increase in the use of our products, particularly Letairis and Ranexa and continued growth of Cayston, it’s our cardiopulmonary business actually ended up last year with well over $1 billion worth of sales. It continues to grow and continues to be an important part of the strategy of the company to expand indications beyond infectious diseases.
And then I just want to do one quick shot at AmBisome, it is still the leading product for the treatment of invasive fungal infection in Europe and continues to perform extremely well for us.
Turning to our pipeline. I just want to say a few things. First of all, we continued to have a robust and deep pipeline. We have a number of opportunities across all of our portfolio products as we continue to invent combine and in-license products to treat various diseases.
You can see our HIV pipeline is continuing to be full with new SGRs being developed in HCV, we are exploring various combinations of different products including 5885, non-nucleoside and 5816.
And then in other diseases, we are starting to explore things like Simtuzumab, which is an anti-body for the treatment of various diseases focusing on Mechanism LOXL2. Actually, we haven’t been talking about it much but I have added a few slides in here on Simtuzumab and we will talk about that later in the presentation.
Oncology is a growing part of our portfolio as we are discovering and developing new products for the treatment of different B-cell disorders. We are at the moment, more focused on CLO and various forms of indolent non-Hodgkin's lymphoma. So we are continuing to broaden our portfolio in those lines.
And then finally I mentioned Ranexa for cardiovascular disease, we have a number of opportunities in cardiovascular disease including, broad indication for Ranexa including combining Ranexa with products like Dronedarone for atrial fibrillation.
And now new molecules that have come out of our discovery research based on the initial mechanisms of Ranexa and I said that total mechanisms because it does hit many different sodium channels and now we think we’ve identified some of those. So we are now being more specific in development of drugs for various cardiovascular and metabolic indications.
I’m going to turn to the HEP-C. This is typically the order that things happened in our one-on-one. So I thought I would structure the presentation this way. So we will start with Hepatitis-C. As you all know Sovaldi was approved on December 6 in the United States. We were able to get that product to market very quickly shipping out to the wholesalers by December 9. And throughout that month, we had a consistent reordering from number of wholesalers.
So beyond just loading up the pipeline, which we had anticipated that month, we did have additional sales and as you can see, we had $136 of sales in December alone. I will say the majority of that was loading up the pipeline, but as I mentioned because they were reorders, we do know that there was slow through into patients during the December timeframe which is quite unusual to be launching a drug in December and have that kind of uptake.
The European Commission approved this on January 17. This has allowed us to launch the product in places like Germany, the UK, France, Austria, Sweden and Finland. In the UK, we are undergoing a nice procedure.
So there is some limited use. In Germany, Austria, Sweden and Finland, we have immediate use in those products that we are selling. And in France, because we had an ATU program ongoing, we have now been able to launch the product into France as well.
So, much more rapid uptake than normal in France because of the ATU program and we did have some sales due to that ATU in the third quarter.
This just looks at the Sovaldi recommendation and dosing and administration information derived from our package inside the United States. So we are proof for genotypes one through four, genotypes one and four is the regimen that we defined in NEUTRINO, which is Sovaldi plus Peg interferon Ribavirin for 12 weeks.
In Genotype 2, Sovaldi provides the basis of an all oral regimen of 12 weeks of therapy in combination with Ribavirin for Genotype 2 patients, whether they be treatment naïve or experienced patients and in Genotype-3 the recommendation is for 24 weeks of therapy based on the study that we ran in Europe allowing us to understand that 24 weeks of therapy was better than 12 weeks of therapy in those patients.
In addition and importantly, we were able to treat interferon in eligible patients with a 24 week course of therapy. And then really importantly, we are able to demonstrate that Sovaldi plus Ribavirin for use of treatment in pre-transplantation patients was highly effective at preventing the recurrence of infection post-transplantation and this is an important dataset for a couple of reasons, one, it is the most severe unmet medical need in Hepatitis-C.
Patients who can’t take any other therapy often end up on a waiting list when they get their transplantation the rate of re-infection is about 100%. So to prevent the recurrence of infection, it’s much better outcome of course, because the re-infected liver often has cirrhotic catastrophic consequences for that patient.
The other important thing that we learnt from this is that Sovaldi plus Ribavirin is fairly safe in these patients and it’s to say, most of the side-effects that we saw in those patients were associated with Ribavirin use.
And so we could take the patients who had the most severely distressed livers, treat them with Sovaldi plus Ribavirin and have a very good outcome. So that suggests that we have a very wide therapeutic index for Sovaldi and that’s what we had observed in earlier studies and has been borne out in studies where we are stressing the system as much as we can.
Lot of questions, a lot of questions about the epidemiology of HCV, where the patients are? Are they coming into therapy and when they are going to come into therapy and these are difficult questions of course for us to answer and we are just beginning to understand the very basics, the very leading-edge of how doctors are treating and how patients are coming onboard.
But it’s going to take us sometime to understand this to greater extend. It took us well over a year to really understand where the patients were and coming from an HIV and in this case, it’s going to take us a while, as we figure out where the segments are coming from, how much is private, how much is public and how we are going to address the physicians.
But I can tell you that, based on the CDC Epidemiology data, we think there is over 4.1 million people who have HCV in the United States. We think of those patients, about 1.7 million have been diagnosed and are under care and of those about 385,000 – I am sorry, 1.7 are diagnosed, of those 385,000 are diagnosed and under care.
Under care in this case means that they’ve seen a physician who can treat HCV within the last 12 months. And so that’s how we segmented the market. Interestingly, in the most recent year that we had data, very few of those were actually treated it was under 60,000 patients were treated.
So, this leaves us a very large pool of patients who have been diagnosed, know they have the disease and have a need for treatment, in particular the 1.3 million who are under – who have been diagnosed but aren’t seeing a physician I think our particular important because we like to get those back into care of course as well.
I just want to talk about the regulatory filings for Sofosbuvir outside the United States and Europe. We did mention earlier that we have an agreement with PMDA, that’s the Japanese Regulatory Authority where we have Sofosbuvir in a Phase III study in Genotype 2 patients. Most like the U.S. this is – Ribavirin dose for 12 weeks. This study enrolls very, very quickly. It was fully enrolled in September of last year.
You may remember we started it in June of last year, which means that our timelines have moved up considerably and we anticipate filing this for approval in the mid-part of 2014 which would put us on the market late 2014 or early 2015. So a much accelerated timeline into Japan versus where we thought we were.
The Genotype 2 patient population in Japan is quite interesting. Most of these patients are older. Most are in their 60s. Most are ineligible for interferon-based regimens or have failed interferon-based regimens and because of their age, they are increasingly at risk of succumbing to liver diseases.
Liver cancer is the number one cancer in Japan right now and it’s mostly driven by HCV. About 25% of patients in Japan are Genotype 2 and there really aren’t many options for these patients. So this is a unique opportunity for us. It was also the rationale for the accelerated timeframe by PMDA because they recognize as such a severe unmet medical need.
And then finally I just wanted to mention, as we always do our filing around the world and I just want to mention a few of the other countries that are important to us are Turkey, Switzerland and Australia, New Zealand where we have filings under review.
We’ve talked about the different ways of therapy that we need to go through. I can tell you, so this is the first generation Sovaldi for Genotype 1 in combination with Interferon and Genotypes 2 and 3 as an all oral regimen. We see many innovations coming including Sofosbuvir plus Ledipasvir.
This is a product that will be Genotype 1 only but it should provide the first all oral regimen and I’ll show some data in a minute for the treatment of Genotype 1. And then of course for continuing this search for broader molecules including 5816 which could handle all six Genotypes and could be the first fixed dose combination that could be used as an all oral across all genotypes.
So this is Ledipasvir plus Sofosbuvir. Ledipasvir of course is a polymerase inhibitor – I am sorry, Sofosbuvir is of course a polymerase inhibitor. Ledipasvir is a NS5A inhibitor. They are both potent, they are both pan-genotypic and they are both once-daily on their own. We’ve combined them into a fixed dose combination that simply means they are combined into one pill for treatment once-daily. And we find that we have a very strong combination with this product and many patients tested.
We’ve recently, back in December, announced of the data from the Ion studies, Ion-1, Ion-2, Ion-3 and these various studies we looked at different patient populations. In Genotype 1 patients in Ion-1, we looked at treatment naïve patients, about 60% of whom were cirrhotic and treated them with 12-weeks of Ledipasvir, Sofosbuvir, plus and minus Ribavirin and as you can see from the chart on far left-hand side, there was no difference from 12-weeks of therapy plus or minus Ribavirin.
So this tells us we have a very high response rate as measured by SVR-12 that Ribavirin doesn’t add anything to it other than additional side-effects and that we have a very strong synergistic combination between Sofosbuvir and Ledipasvir.
In Ion-2, we looked at treatment experience patient about 20% of whom were cirrhotic and we can see that, 12-weeks we got between 93% and 96% of patients who were treated, we saw a minor, but not very pronounced difference adding Ribavirin between 12-weeks in those patients. We did see if you went to 24 weeks that there was 99% of those patients who responded. So slight increase by going to 24-weeks.
In Ion-3, interestingly, we have the separate question which was, could you cure patients who are treatment naïve with less than 12-weeks of therapy. And we looked at 12 – I am sorry, 8-weeks of therapy with Ledipasvir Sofosbuvir – Ledipasvir Sofosbuvir plus Ribavirin we compared it to Ledipasvir Sofosbuvir in combination for 12-weeks.
I am going to really like when we have a different name to say other than Ledipasvir Sofosbuvir by the way. This has been pretty complicated. I hope we don’t add anything third to it before I get that name.
So you can see here that we had 94% response rate at 8-weeks with Ledipasvir Sofosbuvir. So that tells us that we have a very potent combination that in treatment-naïve patients can work for eight weeks and treatment experienced patients can have very, very high response rates in 12-weeks and in fact, that’s what we filed for. So we filed the NDA earlier last month. We are asking for 8 to 12-weeks of therapy without Ribavirin in this case.
So we are looking for 8 to 12-weeks of therapy in these patients and we filed it as a fixed dose combination to just a single-cell. The FDA did grant us breakthrough therapy designation. We don’t yet know when the PDUFA date for that would be, it would presumably would be around eight months from the time of filing and we will get more data back from the FDA and update you as we receive notification.
The filing for Europe is due to go in this month sometime. So sometime before the end of the quarter, we will file in Europe as well and as always, we’ve also worked with the Japanese, so now we have an agreement with PMDA on Genotype 1 patients for the treatment of the fixed dose combination and we have a study that enrolled fully in December looking at 12-weeks of therapy plus or minus Ribavirin.
So we would anticipate filing for approval around the endpoint of this year or just about the same time that we come out with Sofosbuvir for Genotype-2 patients in Japan.
So it’s a very full strategy. It’s a very exciting time for Ledipasvir Sofosbuvir. It’s interesting that we are seeking to replace the therapy that we are just launching with the newer version less than a year after the initial launch.
I did just want to mention one thing about 5816. I mentioned that in the earlier presentation that we are in studies of GS5816. It’s another 5A1 inhibitor. It is pan-genotypic, it is in studies with Sofosbuvir looking at a couple of different doses of 5816 and we will be rolling out data on 5816 in combination with Sofosbuvir, 12-weeks of therapy across six different genotypes of patients. All treatment naïve patients in those data will presented at EASL.
So turning to oncology; I just wanted to take a moment to kind of remind you of what we are doing in oncology. These are growing programs. We have new molecules that we’ve brought into Gilead where we are building out a portfolio looking at two different ways that we could potentially disrupt tumors. One is through the intracellular signaling pathways, these are principally through the kinase pathways that have been defined now.
There are over 300 known kinases that play roles in various pathways of proliferation and differentiation and so, these are the programs that we taking forward. First we have idelalisib that is of course the most advance of our programs and I will show you some data in a moment on idelalisib in a number of indications.
We also have GS9973, that’s our Syk inhibitor or spleen tyrosine kinase inhibitor. That is also potentially useful in a variety of B-Cell disorders, something we’ve shown earlier. We are also looking at combinations of these different products including idelalisib and 9973. And then also we have Momelotinib that is formerly a CYT387. This is a JAK-1 2 inhibitor that’s under investigation for Myeloproliferative disorders. It is most notably like Ruxolitinib which is now approved for Myelofibrosis.
The other products we are taking is the antibodies to disrupt the extra cellular matrix and in fact the enzymes involved in building the extra cellular matrix. We have Simtuzumab, which is an anti- LOXL2 antibody. I have a couple of slides on that later which I will get to. And then GS5745 which is an antibody that disrupts the activity of MMP9 which could be very interesting in different inflammation disorders and solid tumors.
I am going to turn to Idelalisib and just kind of get to the datasets here. These is the CLO data that we recently brought out. This was a study that was stopped early because it was obvious that there was a strong benefit associated with Idelalisib. And if you look at these slides, the blue lines on the top are Idelalisib in combination with Rituximab, the bottom red line is Rituximab alone in both of these graphs. And you can see that whether it’s progression-free survival or overall survival, we have a very strong separation of the curves and a very strong differentiation in favor of the combination versus the individual.
We can look at this further by looking at the individual tumor responses. So the way to think about these slides, is you have either shrinkage or growth of the tumor, growth if the line goes up, shrinkage if the line goes down.
Each line represents an individual patient and we have a cut-up of about 50% tumor shrinkage as our definition of response in this case. And you can see for example with the Idelalisib plus Rituximab study, that a high percentage of patients, over 90% of patients had a 50% or greater response rate given Idelalisib plus Rituximab.
You can see in the placebo plus Rituximab line that we had a very small percentage of patients who had a greater than 50% reduction. Many of the patients had little response to Rituxan, many patients actually progressed on Rituxan.
So it was not a very effective agent in this patient population as these are patients who failed three or four lines of therapy including alkalating agents. So the combination in this population looks to be very strong. And this was the basis for stopping the study. This is also the basis for most recent filing.
This is the similar look at an Indolent non-Hodgkin's lymphoma population, this is a study that was open-label Phase II and we can see from this study that again we had a very strong response rate with over 50% of patients having a reduction that’s greater than 50% and again a population of patients who have been heavily pre-treated and who have run out of options. From this study, we estimate that there is a progression-free survival of almost 12 months, so 11.7 months in this patient population.
This open-label Phase II study was also the basis of an NDA filing and together we now have two packages under filing. The Indolent non-Hodgkin's lymphoma filing, that went in first in September of last year.
That has been granted traditional review based on the fact that it’s an open-label Phase II study and we’ve been given a review date of September 11 of 2014. We submitted the EMA in Europe in October 28 of last year and that product is under review for Indolent non-Hodgkin's lymphoma.
After we filed that NDA, we then received the data on 106, because there was a planned interim analysis that stopped the study early. Based on guidance from FDA, we then tiled a separate application for the treatment of CLO with Idelalisib. That application was given breakthrough designation. And so as a result, even though it’s a later filing we have an earlier PDUFA dater of August 6 of this year and so our understanding is both applications are currently under review. We are hopeful that the timelines will merge, although there is no guarantee during our recycle like this.
We had also filed with EMA the application for CLO as well and so those indications are being reviewed concurrently in Europe and should come out later this year. So this is our first forays. We are ahead of schedule where we thought we would be because of the good results that we had both in the Indolent non-Hodgkin's lymphoma and early stoppage of the 106 study.
But we have a number of Phase III studies that are ongoing, including studies in first line where we are looking to reduce the minimal residual disease to see if can achieve MRD negativity in some patients and looking at other sequential therapies and long-term therapies to really help understand the profile of Idelalisib and where it can be best used to help patients with different lymphomas especially in an evolving landscape.
I just want to turn one moment to Momelotinib, this is the Phase III study design in patients with myelofibrosis. So we have initiated a head-to-head study between Momelotinib and Ruxolitinib. Ruxolitinib is the active ingredient in JAK. These are treatment naïve patients who we intend to rollover 400 patients looking for benefits including reduction in spleen size at 24 weeks and including transfusion dependency.
So we are looking both at the efficacy and the side-effect profiles which differentiate Momelotinib versus Ruxolitinib. Additionally, we anticipate starting later this quarter a study where we are going to take patients who are previously treated with Ruxolitinib and treat them with Momelotinib or randomized half the patients to best available treatment option based on the physicians’ opinion. And so this will be a study to see what do you do with patients who failed Ruxolitinib for various reasons.
I am going to turn just briefly to the biologics. This is where I am going to talk about Simtuzumab. So this is a humanized monoclonal antibody that inhibits an enzyme called LOXL2. LOXL2 is involved in the pathogenesis of fibrotic – the fibrous matrix and fibrous tissues surrounding a lot of damaged organs. LOXL2 is homologous to LOXL1. LOXL1 is involved in would repair. This is an antibody that’s very specific for LOXL2 and doesn’t target LOXL1. So we have a very high therapeutic index for LOXL2 over LOXL1.
We’ve decided to take this into pancreatic and colorectal cancers, because there is increasing amount of LOXL2 is associated with the increasing rate of disease in these indications. And so the thought is, we can either slowdown the progression of the disease or as we saw in animal models, make pancreatic or colorectal cancers more susceptible to current chemotherapy. So this is looking at it in second line.
We have also seen significant LOXL2 protein expression in tumors biopsy with no expression in healthy surrounding tissue. And we’ve seen the marine model where we have a – as a circuit for this where we do see enhanced efficacy in primary and secondary metastatic cancer models. So we have some really interesting pre-clinical evidence and this could be useful.
We’ve dosed Simtuzumab up to 20mg per k. It is safe and well tolerated at those doses and so these studies are our first attempt to see if the activity that we see in these remodels will translate into evidence of human activity.
This just looks at the Phase II studies. I think it’s going to be difficult to see from back there. But it is a study where we look at Simtuzumab plus – in alone in pancreatic cancer. We will look at FOLFIRI plus Simtuzumab versus FOLFIRI placebo and in myelofibrosis we are studying Ruxolitinib plus Simtuzumab plus Simtuzumab alone.
So these are three studies on oncology where we have opportunities to change the standard of care for certain patents based on the activity of Simtuzumab. But because Simtuzumab works the way it does on the extra cellular matrix, it has activity in fibrotic diseases which is actually quite interesting as well.
In liver disease, we are looking at liver fibrosis with Simtuzumab for 10mg/kg, we are doing it also in Primary Sclerosing Cholangitis that's what PSC stands for. It’s a very rare bile duct disorder. It’s very devastating often fatal. We are looking at Simtuzumab at 75 or 125 mg/kg versus placebo. Actually that's a standard dose, not mg/kg, versus placebo.
This is one of those studies where you could have an early read out because you are going to actually image the bile duct and see changes associated with therapy which could be quite interesting. And then we are also looking at Simtuzumab in NASH.
We have two ongoing studies looking at different doses. These studies are enrolling in a fairly progressive patients, patients who have advanced disease. These studies could be enrolled by the mid-part of this year which will allow us to have our first four day read out – 48-week read out sometime before the end – before the middle part of next year. So this could be the exciting first foray into NASH for us using an antibody.
And then finally, we have a study in idiopathic pulmonary fibrosis. I think this is a very interesting study because it seize off some work that we did earlier. Looking at a 125 milligrams of Simtuzumab, the work that we did earlier actually looked at LOXL2 levels and the study that we did couple of years ago using Ambrisentan to see if that would have an impact on IPS.
It turns out the risk benefit didn’t work out in that study and we shut that study down a couple of years ago. But looking at the samples that came out of that study we did see a correlation between high LOXL2 levels in the blood and faster progression of those patients. So we have established a cut-off that predicts patients.
We think at least it will be used to try to predict patients who will progress more quickly and that will allow us to perhaps have an impact on disease sooner by selecting those patients who are more likely to progress. So there was an interesting outcome there correlating directly with LOXL2 levels.
So finally, I don’t know I may have a couple of minutes left, but I want to talk about the benefits of SCRs. I think we’ve talked about how they improved adherence, the improved outcomes, the improved rate of hospitalization for patients. Stribild and Complera are two leading SCRs have done extremely well and are being adopted rapidly across the United States and Europe based on the ease of administration based on lower side-effect profiles, based on the unmet need for simplification of therapy out there.
I am just going to skip to this chart to look at the top prescribed regimens across the U.S. and Europe. And all the rectangles that are in blue are single tablet regimens and this looks at the top six regimens either newly diagnosed patients who are coming on to therapy that’s the treatment naïve patients or across all patients in the United States and the largest five countries of Europe.
And you can see in the U.S., Stribild then Complera the Atripla are the top three regimens used in the United States in treatment naïve patients, which means more patients are coming on single-tablet regimens than any other regimens, followed by various protease inhibitors or r integrase inhibitors in combination with Truvada.
So, again, Gilead occupies all six slots in the top six of all of these charts. You can see across all patients Atripla, which of course has been on the market since 2006, it’s still the number one products used overall.
Complera has now become number two and Stribild has moved up to number four. So we are seeing rapid adoption and uptake across these different regimens. In Europe, we’ve now seen the Eviplera which is the name of Complera in Europe has now replace Atripla as the number one regimen in Europe and continues to grow and differentiate and has now moved into the number three slot across all patients.
So we think these single-tablet regimens will continue to benefit patients as we move forward and I just finally want to mention, TAF, it’s a molecule that are thinking replace Viread into a variety of regimens. We have eight ongoing Phase III studies. Those studies will start to read out the later part of this year which will allow us to file TAF for HIV early next year.
So, I know I am over my time. I want to thank you very much for your attention. We look forward to presenting at various conferences including CROI this week here in Boston and EASL coming up in London next month. So thank you very much for your support and attention.
Earnings Call Part 2: