The Food and Drug Administration decided to reject Gilead Sciences’ application for the blockbuster arthritis medicine announced Tuesday night, indiscriminate investors Wednesday morning, snapping up a handful of shares of major biopharma companies.
The drug, a so-called JAK inhibitor called filagotinab, was made a major product for Gilead (ticker: GILD). JPMorgan analyst Corey Kasimov wrote Tuesday night that he had previously estimated that the drug would bring in $ 2 billion per year in sales at its peak; FactSet consensus estimates the drug to be $ 989 million in sales by 2025.
Cowen analyst Phil Nadeau wrote on Tuesday night that the development delays at least a year in the launch of filgotinib in the US.
Gilead’s stock declined as much as 3.2% on Wednesday morning, while shares of Gilead’s partner on Filagotinib, Galápagos (GLPG), declined 24.3%. Shares of ABVV (ABBV), which are members of the same class of drugs as Rinovic, filagotinb, were up 1.3%, while shares of Pfizer (PFE), which also sell the same type of drugs, were up 0.3%. The S&P 500 was up 0.2%.
In a note on Tuesday night, Kasimov called the development “the worst case scenario” and “shock”.
In addition to questions surrounding the drug’s effect on the sperm count, Gilead said the FDA had “expressed concern” about the risk / benefit profile of the 200-mg dose of the drug.
Kasimov wrote, “A possible lack of flexibility could affect the competitive profile of Filgo.” “Further, it gives competitors another year in which to give them an edge in their market.”
Rheumatoid arthritis is a highly competitive sign, given the large patient population. In a note on Wednesday, Mizuho analyst Wamil Dewan wrote that the FDA letter was a “clear positive” for AbbVie. He wrote that it is also positive for Pfizer, which sells a JAK inhibitor called Xeljanz, although he said that Pfizer is also developing other JAK inhibitors, adding that he wonders “if filgotinib news to investors Will make them more cautious on capacity for “products in the US market, given the various safety concerns the FDA has raised over the broader class.” ”
For the Galápagos, the European biotech working with Gilead, the picture relates specifically. “We continue to be confident in the clinical profile of folgotetib, but we are very challenged by regulatory decisions such as those with disabilities,” wrote Cantor FitzGerald analyst Ileana Merley in a note on Wednesday. Merle cut its price target on Galápagos from $ 192 to $ 134. The stock was trading at $ 142.10 on Wednesday morning. He maintained his neutral rating.
In a statement on Tuesday night, Gilead’s chief medical officer, Drs. Mardad Percy said the company was disappointed, but still believes in the “benefit / risk profile of filgotinib” [rheumatoid arthritis]. “The Chief Medical Officer of the Galápagos, Dr. Walid Abi-Saab, said that the letter was” very disappointing and providing a comprehensive data package. ”
Write Josh Nathan-Kazis at [email protected]