Gilead Sciences started charging for remdesivir in July. Given its status then as the only drug authorized for COVID-19 in the U.S., industry watchers immediately forecast multibillion-dollar sales for this year.
But new clinical data have now put the Big Biotech in defense mode—and prompted analysts to dial down their expectations.
In the third quarter, Gilead sold $873 million of remdesivir, handily topping Wall Street’s previous estimate of $772 million. The drug was fully approved by the FDA last week, under the brand name Veklury, to treat hospitalized COVID-19 patients.
Still, Gilead dialed down its full-year sales outlook, cutting the top end to $23.5 billion from $25 billion, a revision that’s “tied not entirely, but almost entirely to expectations around Veklury,” Gilead’s chief financial officer, Andrew Dickinson, told investors during a call Wednesday.
The third-quarter beat has a bit of inventory build to thank, as Gilead ramped up manufacturing that exceeded demand, Johanna Mercier, Gilead’s chief commercial officer, explained on the call. That excessive inventory will gradually be consumed in the fourth quarter. As of June, Gilead had produced more than 190,000 treatment courses of Veklury, and it now plans to top 2 million courses by year-end.
RBC Capital Markets analyst Brian Abrahams, for his part, lowered his own Veklury sales projection to $948 million in the fourth quarter. Cantor Fitzgerald analyst Alethia Young was even more dramatic in reducing her estimates, from $1.2 billion to $694 million for the final quarter of the year.
That would translate to 2020 Veklury sales of $1.82 billion under Abrahams' estimate and $1.47 billion under Young's. Still impressive for a new drug in just six months, but below the $3 billion or so that many industry watchers were floating before.
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“With its IV administration profile, evolving data on optimal patients, and stricter COVID-19 hospitalization criteria, we expect more modest [quarter-over-quarter] growth than previously expected even with our expectations for sequential growth in hospitalizations and demand,” Abrahams said.
The “evolving data” part could be key.
In the third quarter, Veklury sales were almost entirely recorded in the U.S., as the Trump administration secured almost all Gilead’s supply during the quarter. About 40% to 50% of patients hospitalized in the U.S. were treated with the Gilead med, and the number “will only grow as people better understand the data now that it’s been published as well as approved through the FDA,” Mercier said. Thing is, it might not.
Veklury’s efficacy—as well as the FDA’s decision to approve it—recently came under serious question after a large study by the World Health Organization (WHO) found it offered “little or no effect” in hospitalized COVID-19 patients, in terms of recovery time, requirement for ventilators and death rate.
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Gilead’s been attacking that finding since its revelation two weeks ago, arguing the open-label nature of the study makes its conclusions unreliable. “There are components of the study design and data that should provide pause,” Gilead Chief Medical Officer Merdad Parsey said on the call.
Parsey pointed out that the WHO Solidarity trial didn’t distinguish between patients requiring low- or high-flow oxygen. It had no data monitoring, no data verification and a hefty 20% of the data are missing in the preliminary analysis WHO released. “These may be clarified or placed into appropriate context during the peer review process,” he said.
In a study conducted by the National Institute of Allergy and Infectious Diseases—which helped Veklury earn its FDA nod—adding Veklury to standard of care shortened time to recovery by a median five days (33%), a further one-day improvement over interim results unveiled in May, according to updated data published earlier this month in The New England Journal of Medicine.
However, although the researchers in the NEJM study claimed benefits in hospitalized patients in general, the benefit was almost entirely driven by patients who require some oxygen support but not ventilation or high-flow oxygen. Patients on low oxygen who got Veklury were about 70% less likely to die than those who received placebo, while those critically ill patients saw no difference in death rates.
“Sicker patients on high-flow oxygen and mechanical ventilation may need an antiviral, but it will be insufficient to treat the inflammation,” Parsey acknowledged, stressing the importance of separating low- and high-flow oxygen for analysis.
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As Parsey’s poking holes in the WHO Solidarity trial, the seemingly contradictory results for Veklury still raised many questions that haven't been answered. For example, a Gilead-sponsored trial found a 10-day course of Veklury performed even worse than a five-day regimen in moderate COVDI-19 patients. The FDA’s decision to wave through the med without convening an independent expert committee, despite the mixed data, also raised a few eyebrows.
Starting this month, Gilead has taken back distribution of Veklury from the U.S. government into its own hands, working with AmerisouceBergen to sell the drug directly to U.S. hospitals.
Even though the company has narrowed its full-year guidance, Mercier said it’s still challenging to predict underlying demand for Veklury, given fluctuations in infection and hospitalization rates as well as potential vaccines and up-and-coming new treatments. Both Regeneron and Eli Lilly have filed their antibody drugs for emergency use authorization in the U.S.
CEO Daniel O’Day, while stressing being “adaptable and flexible” with Veklury’s role at Gilead, said the company feels “very strongly that Veklury will contribute to our overall sales, be an important source of cash for our business and allow us to pay down debt and make sure that we continue to invest in the routine part of our business in antivirals and beyond.”
Overall, Gilead’s third-quarter sales reached $6.49 billion, up 18% over the same period last year. Other than Veklury, HIV drugs Biktarvy and Descovy also contributed to the growth.