Gilead anticipates the Food and Drug Administration will act quickly to grant emergency clearance to its COVID-19 drug remdesvir, which was shown this week to be effective against the disease in a closely tracked government-run clinical trial.
An authorization, particularly if followed by a full approval, would greatly crank up the pressure on Gilead. Wall Street expects Gilead to make money on remdesivir, but the company will be harshly judged if it chooses profits over broad and affordable access to the drug.
Analysts and investors appear increasingly skeptical Gilead can accomplish both, particularly after executives disclosed in an earnings call Thursday that the company is prepared to pour as much as $1 billion into remdesivir this year alone. Shares in Gilead fell 5% Friday following the news, which led to stock downgrades by J.P. Morgan, SunTrust Bank and Raymond James.
Gilead bought itself some time by announcing last month plans to donate 1.5 million doses of remdesivir, its entire supply of the antiviral therapy.
But that's far from enough to satisfy the potential demand, should regulators clear the drug for use and clinical studies continue to build its case as an effective COVID-19 treatment. Once its donated stockpile runs out, Gilead will need to set a price and determine where it should get sent as well as which patients should get treated.
"The allocation process is likely to be challenging, controversial and ultimately highly political, and once Gilead starts charging for the product we expect calls for the exercise of march-in rights and compulsory or no-cost licensing to become louder," wrote Geoffrey Porges, an analyst at the investment bank SVB Leerink, in a note to clients.
Anticipating the heavy demand, Gilead has quickly readied plans to produce, by year's end, 1 million treatment courses, currently assumed to consist of 10 doses given once a day.
Building out manufacturing capacity, particularly this fast, is an enormously expensive endeavor. Already, Gilead has spent $50 million on remdesivir through the end of March, an investment made without any certainty the trials testing the drug would be positive.
Gilead's plans to spend as much as $950 million more this year, with little clarity on whether it'll make money on the drug, is even more unusual.
"A billion of expenses, and not knowing the revenue, it's an interesting position," said Michael Yee, an analyst at Jefferies, on the call. Gilead spent about $4.6 billion to produce its portfolio of nearly two dozen marketed drugs last year, as well as another $9 billion on research and development.
The urgency of the coronavirus pandemic, and the desperate need for any effective treatments to help the tens of thousands of patients in intensive care, isn't the usual backdrop to the business questions now facing Gilead. But the company has been in the spotlight before, sparking controversy and backlash over how it approached selling its drugs for HIV and, more recently, hepatitis C.
"There's been no other time like this in the history of the planet than any of us have been alive," said Gilead CEO Daniel O'Day on the conference call. "There is no rule book out there, other than that we need to be very thoughtful about how we can make sure we provide access of our medicines to patients around the globe."
That Gilead is already at this point reflects the speed with which the coronavirus has upended the world, and the biopharmaceutical industry along with it.
Four months ago, remdesivir was a little known drug that had been unsuccessfully developed for use against Ebola virus infections. Gilead had about 5,000 treatment courses on hand.
As more became known about the new coronavirus, however, remdesivir drew attention for its apparent effectiveness against similar viruses, such as SARS and MERS, in laboratory and animal tests. Investigators in China, and then Gilead and the U.S. National Institutes of Health, pressed remdesivir into large clinical studies, three of which this week delivered results.
The NIH-led study, considered by many to be the most definitive assessment, showed treatment with remdesivir helped patients hospitalized with COVID-19 recover faster than placebo, by a median of four days. Fewer patients treated with Gilead's drug died than those given placebo, although the difference between the two numbers wasn't large enough to be judged statistically significant.
While the data represent some proof remdesivir helps patients with coronavirus disease, it's far from the usual body of evidence drugmakers submit to the FDA for approval. Gilead's own trial lacked a placebo comparison, making its results difficult to assess, and the China-based trial had to be stopped early due to low enrollment.
An emergency use authorization, or EUA, could come first — and likely soon, according to reports — allowing Gilead to distribute doses of the drug to hospitals as well as enable the company to charge for its product. So far, Gilead has been providing remdesivir to patients in clinical trials and through an expanded access program set up after the company was overwhelmed by demands for compassionate use of the drug.
"Our goal here is to get a full approval for remdesivir. We feel the data supports that and then EUA therefore is a step to really a more formalized approval," O'Day said.
Already, European health regulators have begun a rolling review of data for remdesivir, and O'Day's comments on the Thursday call suggested the FDA may be doing the same.
"They've been open to receiving parts of the submission, which has been very helpful under a normal process, plus there's the whole EUA process that kind of goes on top of that," O'Day said, referring to the FDA.
Gilead is also in discussions with "large, sophisticated companies" worldwide to potentially establish separate manufacturing supply chains of remdesivir, although company CFO Andrew Dickinson indicated those talks are still early.