- Gilead and Galapagos are ending all studies of an experimental drug for lung disease after independent reviewers determined its benefits do not outweigh the risks.
- The decision to end research on ziritaxestat, which was being tested as a treatment for idiopathic pulmonary fibrosis, marks a second major failure for the Gilead-Galapagos partnership. In August, the Food and Drug Administration unexpectedly rejected filgotinib, a rheumatoid arthritis drug that was central to the 10-year, $5 billion pact the companies inked in mid-2019.
- Galapagos and Gilead didn't provide details of the issues with ziritaxestat in a Wednesday release. Rather, they said data would be presented at future medical meetings. The monitoring board acted in part because of mortality trends observed among patients, Mizuho Securities analyst Salim Syed wrote in a note to investors, citing a statement he received from Gilead. Galapagos shares tumbled 18% Wednesday.
Gilead and Galapagos initially linked up through a 2015 deal centered around filgotinib. Partnering with the Belgian biotech, which has largely focused on treatments for inflammation and fibrosis, offered Gilead a foothold in immunology at a time when the company was trying to diversify beyond its core business of infectious disease drugs.
So far, though, the partnership has not gone as Gilead hoped. Following the FDA's surprise rejection, Gilead backed away from filgotinib and said it would not be pursuing pursue U.S. approval in the rheumatoid arthritis indication. Gilead also returned European development and commercial rights to Galapagos.
Wednesday's update on ziritaxestat now casts further doubt on the first major deal struck by Daniel O'Day, who became Gilead's chief executive in early 2019.
The Phase 3 research for ziritaxestat included two trials that were slated to enroll a combined 1,500 patients with idiopathic pulmonary fibrosis, which causes scar tissue to build up inside the lungs and makes breathing difficult. Patients in the studies received either a placebo or one of two doses of ziritaxestat, on top of standard treatment for the disease.
Galapagos and Gilead said that, after hearing from the independent reviewers, they have chosen to end all trials with the medicine, including a Phase 2a study in systemic sclerosis.
The failure of ziritaxestat means the chance of Gilead realizing a positive return on investment for the Galapagos deal is "looking increasingly slim," Baird analyst Brian Skorney wrote in a note to investors.
According to Skorney, the best hope for the deal may now rest in a set of proof-of-concept studies for a drug called GLPG3970, which is being tested in a variety of inflammatory diseases. If results show the therapy can help restore immune balance, the program could prove "quite valuable over the long term and may help Gilead recuperate some of the value" of the Galapagos alliance, he wrote.
In the meantime, Gilead has been trying to bulk up in other areas. Last year, the company spent more than $27 billion in a series of deals meant to bolster the company's position in cancer research and, in particular, immuno-oncology.