- Gilead Sciences has stopped a closely watched trial involving an experimental cancer drug the company acquired three years ago in a roughly $5 billion deal, marking the latest setback in the company’s plans to grow its oncology business.
- According to Gilead, a Phase 3 study testing its drug magrolimab in patients with the bone marrow cancer myelodysplastic syndrome, or MDS, was discontinued because treatment proved ineffective at an interim analysis. Safety findings were “consistent” with the drug’s profile and what’s typically observed with MDS patients, the company said late Friday. It didn’t provide details.
- Gilead acquired magrolimab through a buyout of biotechnology company Forty Seven. The drug is still being evaluated in two other pivotal trials in acute myeloid leukemia, with results expected next year. However, after Friday’s announcement, Wall Street analysts appear to be viewing those trials with more skepticism.
The failure of magrolimb adds to questions about Gilead’s business development strategy.
In recent years, Gilead has spent billions of dollars on deals to expand its research in oncology and inflammatory diseases. Some of those deals, such as acquisitions of Kite Pharma and Immunomedics, have led to approved therapies. The cell therapy business Gilead established through the Kite deal is now performing well, with sales of its CAR-T products surging to $448 million last quarter.
But the rest of Gilead’s cancer business isn’t doing as well, while other deals haven’t panned out. Gilead pulled two indications for its blood cancer drug Zydelig, while Trodelvy, acquired via Immunomedics, has been surpassed by rival medicines. A partnership with Arcus Biosciences hasn’t yet paid dividends, nor has an inflammation-focused research deal with biotech Galapagos.
Magrolimab’s prospects have declined over the last couple years, too, amid delays, safety concerns and efficacy results that waned with more study follow-up. Still, the fact that the drug proved ineffective in its first Phase 3 study “may further hurt sentiment around both [Gilead’s] oncology programs and their M&A prowess,” as it “adds to a string of setbacks in recent years from acquired or partnered programs,” wrote RBC Capital Markets analyst Brian Abrahams in a note to clients.
The results add to the spotlight on Trodelvy, which is already marketed for breast cancer but is being tested in lung cancer, too. Multiple studies are ongoing, including a Phase 2 trial evaluating the drug in combination with immunotherapy and chemotherapy. Data are expected this quarter, yet expectations are low, as AstraZeneca and Daiichi Sankyo’s rival drug just produced mixed results in a similar trial and Trodelvy is “seen to be … weaker,” wrote Jefferies analyst Michael Yee in an investor note.
Others could be impacted by magrolimab’s failure, too. The medicine is part of a class of cancer drugs called CD47 inhibitors, which block a mechanism cancer cells use to evade the immune system. CD47 inhibitors have been viewed as a potential backbone for cancer immunotherapy combinations, but that hasn’t yet been established in testing.
Pfizer bought Trillium Therapeutics for a CD47 blocker currently in Phase 2 development for blood cancers. Biotech ALX Oncology has one it’s evaluating in solid tumors and blood malignancies. Magrolimab’s setback is a “surprise and disappointment to the CD47 space,” wrote Cantor Fitzgerald analyst Li Watsek, who is expecting ALX’s shares to be “under pressure” on Monday.