Gilead Sciences discovered that it's the target of another U.S. government probe. The Justice Department has subpoenaed documents about the company's manufacturing, quality control and distribution, focused on five marketed drugs and one experimental compound. While the company wouldn't offer details, Reuters notes that FDA recently warned Gilead about infractions at its San Dimas, CA, plant where many of its drugs are made.
Gilead says it's cooperating with the probe, which it disclosed late Friday after the markets closed. Shares fell by 2 percent in after-market trading, Barron's reports.
As Reuters also notes, Gilead has received two similar subpoenas in the past, one in 2006 and another in mid-2009. Neither resulted in a penalty, ISI Group analyst Mark Schoenebaum said. "The worst case outcome is likely a fine (which could be substantial...)," Schoenebaum wrote in a note to investors Friday, pointing out that resolving the probe "will likely take years."
In a follow-up report over the weekend, however, Schoenebaum drew some distinctions between the current subpoena and previous ones, Pharmalot says. For instance, the earlier subpoenas didn't involve manufacturing. Nor were they part of criminal probes, as the new one is. "For now the company has not been willing to quantify or qualify the extent to which their operations may (or may not) be interrupted," he wrote, adding that the probe involves Gilead's two biggest drugs, Atripla and Truvada. The upshot? "[T]his is concerning, but this may be largely overblown."