Gilead's ready to spend big on Descovy, filgotinib launches as hep C and Yescarta struggle: CEO

Gilead
Gilead's Q3 revenues matched analyst expectations at $5.60 billion. (Gilead China)

If Gilead’s investors are worried the company’s new leadership team won’t pony up to support key launches—starting with HIV drug Descovy in PrEP—they don’t need to be, according to CEO Daniel O’Day.

“I’ve … been a student of the history here at Gilead,” O’Day, who took the reins in March, said on the company’s Q3 conference call Thursday, noting that “at times of important launches” investment has “increased correspondingly in the interest of patients, in the interest of shareholders.”

And “that type of philosophy will continue,” he assured listeners. After all, “you only have one chance to launch a product in this industry.”

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O’Day is already putting his money where his mouth is, commercial chief Johanna Mercier confirmed on the call. Gilead has “augmented the field team” for Descovy, pulling reps off a cardiopulmonary portfolio that’s been hit by generic competition.

The clock is ticking for Gilead, which landed its Descovy PrEP approval earlier this month. The company is racing to convert patients currently on Truvada over to the newer med before generics descend, and it’s counting on incremental improvements in bone and kidney safety to help it make its case.

To that end, the Big Biotech is focusing its efforts on a couple thousand specialists who “have experience converting” patients from so-called TDF-based regimens such as Truvada to newer TAF-based regimens like Descovy, Mercier said.

In the meantime, Gilead is looking ahead to another rollout, too, and that’s for JAK inhibitor filgotinib. The company has already filed the drug in the EU and Japan, and it’s “on track” to complete it’s U.S. filing by the end of the year, O’Day said, adding that “teams around the world are preparing for launch.”

“We will also make sure that we have a competitive launch of filgotinib because we know it will be essential to have the right share of voice to get that off to a good start,” he said.

Things haven’t looked great lately for the marketed members of filgotinib’s class. After the FDA limited use of Pfizer’s Xeljanz and added a boxed warning to its label, it slapped a black box warning on new AbbVie approval Rinvoq despite the better safety profile it displayed in trials.

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The moves don’t bode well for filgotinib, “which is depending on greater JAK1 specificity, and lower adverse event liabilities, for its long-term positioning,” SVB Leerink analyst Geoffrey Porges wrote in an August research note.

And on top of that, the candidate recently missed primary endpoints in trials for lupus and Sjogren's syndrome, Gilead said Thursday.

Ultimately, Gilead is hoping the launches of both Descovy in PrEP and of filgotinib will buoy a top line that’s been plagued by declining hepatitis C revenues and the failure of CAR-T therapy Yescarta to get off the ground. Q3 revenues matched analyst expectations at $5.60 billion, despite misses from the hep C franchise, Yescarta, and even quick-launching HIV standout Biktarvy. Earnings per share, meanwhile, just edged out forecasts at $1.75.

Overall, it was “a relatively underwhelming albeit in-line 3Q,” JPMorgan analyst Cory Kasimov wrote in a note to clients.