by Ian Harvey
February 23, 2020
On Friday, whilst most stocks pulled-back, Gilead Sciences jumped 4.03%, to settle at $69.70; and another 0.86% after hours.
Gilead’s remdesivir may be a possible treatment for the coronavirus. As well, filgotinib, the rheumatoid arthritis treatment, may compensate for declines in sales of the company's older drugs.
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Friday saw the Dow stumble with a 227-point loss, due to the resurfacing of coronavirus fears, after over 800 new cases were reported overnight in China. The S&P 500 and tech-rich Nasdaq also finished sharply lower, with all three benchmarks finishing with weekly losses of 1% or more.
However, the research-based biopharmaceutical company, Gilead Sciences, Inc. (NASDAQ:GILD), the second biggest biotech company behind Amgen (AMGN) in terms of market valuation, bucked this downward trend suffered by most other stocks and jumped over 4.0% during Friday trading, and then continued its upwards spiral in after-hours trading.
It appears that Gilead could possibly hold the key to containing and treating the coronavirus. Chinese officials think the company just might.
This, as well as filgotinib, the rheumatoid arthritis treatment, which is now under review at the U.S. Food and Drug Administration, helping compensate for declines in sales of the company's older drugs, has helped Gilead stay in the green, and also jump upwards, despite the overall market pullback on Friday.
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Chinese researchers reportedly have applied for a local patent on an experimental Gilead drug that they believe could help fight the novel coronavirus outbreak - and also significantly bolster Gilead's bottom-line going forward.
The Wuhan Institute of Virology – based in the central Chinese city at the epicenter of the epidemic – has applied for a patent in China for the use of Remdesivir, an antiviral therapy used to treat infectious diseases including Ebola and SARS.
The application was made on Jan. 21 according to a Feb. 4 statement on the institute’s website.
In December, Gilead and Japan-based pharma Eisai entered into a collaboration agreement for the co-promotion of a drug called filgotinib as a rheumatoid arthritis treatment, pending approval. Further, Gilead announced it submitted an application for filgotinib approval to U.S. regulators.
Standard review takes about 10 months, while priority review is completed in about six months. Filgotinib is an oral JAK1 inhibitor for adults suffering from moderate to severe rheumatoid arthritis. JAK inhibitors block the action of enzymes that support the inflammation process.
For Gilead Sciences, the opportunity is significant. The global rheumatoid arthritis market is forecast to reach $34 billion by 2025, and the North American market alone was worth $9.9 billion in 2017.
Arthritis Foundation data show that 1.5 million Americans have rheumatoid arthritis. EvaluatePharma predicts filgotinib could bring in global sales of $1.3 billion in 2024.
Overall, filgotinib is a reason to be optimistic about Gilead Sciences.
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Gilead announced China approved chronic hepatitis C treatment Vosevi.
Also in December, subsidiary Kite asked the FDA to approve its cancer treatment, dubbed KTX-X19, for patients with mantle cell lymphoma. Gilead bought Kite for $11.9 billion in 2017. Kite makes cancer treatments using a patient's own immune cells.
Gilead announced it would license a respiratory and herpes antiviral program from pharmaceutical giant Novartis (NVS). Novartis will receive an undisclosed upfront payment and up to an additional $291 million in potential milestone payments.
In April 2019, Gilead announced collaboration with privately held Insitro to investigate potential treatments for nonalcoholic steatohepatitis. Insitro uses machine learning to build models to understand diseases.
The company also collaborated with Kiniksa Pharmaceuticals, Ltd. KNSA to conduct a phase II, multicenter study of mavrilimumab, an investigational, fully-human monoclonal antibody that targets granulocyte macrophage colony stimulating factor receptor alpha, in combination with Yescarta in patients with relapsed or refractory large B-cell lymphoma.
Importantly, Gilead named a new chief executive in December 2018. Former Roche (RHHBY) executive Daniel O'Day took the helm at Gilead on March 1, replacing former Gilead CEO John Milligan.
As well, Gilead Sciences hired Mike Quigley who was most recently head of Bristol-Myers Squibb's (NYSE: BMY) tumor microenvironment modulation thematic research center — leading a team essentially trying to build up the ability of so-called cancer immunotherapy drugs to work in more patients with more types of cancer — and will be Gilead's senior vice president of research biology.
Gilead shares are now very cheap relative to its S&P 500 peers; and with a company that has products for vast markets and many others waiting to grow revenue in the years to come, a great opportunity presents itself.
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