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Gilead Reports $7.4 Billion in Q1 Revenue, Most Robust Pipeline Ever
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With the most “robust, complete internal pipeline” in its history, Gilead Sciences had a “stellar” first quarter in 2015 with $7.4 billion in revenue, and expects $28 to $29 billion in revenue for the 2015 fiscal year, according to webcasted overviews delivered by the company’s president and executive vice president.
Expanding commercial portfolio
Gilead’s commercial portfolio includes 19 marketed products, the best known of which include single-tablet regimens for HIV, according to Robin L. Washington, Gilead's executive vice president and CFO. “We currently have over eight medicines available for the treatment of HIV,” she said during her presentation at the William Blair 35th Annual Growth Stock Conference in Chicago.
Other portfolio highlights include Harvoni (ledipasvir/sofosbuvir) and Sovaldi (sofosbuvir) for HCV, the cardiovascular drugs Letairis (ambrisentan) and Ranexa (ranolazine), which yielded over $1 billion in U.S. sales in 2014, and Gilead’s first launch in oncology, Zydelig (idelalisib) for chronic lymphocytic leukemia, small lymphocytic lymphoma and follicular B-cell non-Hodgkin’s lymphoma.
“Our commercial success has … resulted in nice upward trajectory in revenue over the years,” Washington said. “Specifically, … in 2014 we more than doubled net product revenue … and that’s the result of commercialization and sales of our hepatitis C cure products Harvoni and Sovaldi.”
A focus on profitable revenue growth is “culturally engrained” in Gilead, Washington said. In addition to a 52% year to year change in revenue, “we actually delivered almost 100% growth in [exchange traded funds],” she said.
In a separate webinar broadcasted from the Goldman Sachs conference, John F. Milligan, PhD, president and chief operating officer of Gilead, said they are working on deploying capital, developing the internal pipeline and continuing to buy back stock for shareholders.
“We are a long cycle business, so we always are deploying capital into our pipeline for the future,” Milligan said. “We have more phase 2 and 3 studies than ever before; we are creating strong opportunities in HIV and HCV and that search for another growth level in oncology.”
HIV/AIDS pipeline
“Gilead is a leader in HIV/AIDs … because of our focus on single-tablet regimens,” Washington said, which provides simplicity and safety. “We believe we’ve helped make single-tablet regimens the standard of care for HIV,” which also improves adherence and prevents drug resistance. “Therefore we continue to focus our [research and development] in this effort.”
One highlight in Gilead’s HIV pipeline is GS-9620, a TLR-7 agonist. “It’s in early stages, but it’s something we’re actually looking at for the cure of HIV,” she said.
Other highlights include the company’s most recent launch of Stribild (cobicistat; elvitegravir; emtricitabine; tenofovir disoproxil fumarate), a Truvada (emtricitabine/tenofovir disoproxil fumarate)-based single-tablet regimen. Furthermore, Washington highlighted tenofovir alafenamide (TAF ) as “the new backbone of therapy for our HIV single-tablet regimen,” which provides lower dosing (about 1/10 of a dose), allowing for combinations with more easily swallowed pill sizes, and which “also has a favorable safety profile compared to Viread [tenofovir disoproxil fumarate].”
Phase 3 results presented last year at CROI, she said, demonstrated a single-tablet regimen of elvitegravir, cobicistat, emtricitabine and TAF 10 mg (E/C/F/TAF) was noninferior to Stribild, and “we’ve seen improvement with TAF relative to renal impairment … and bone mineral density,” which are key in an aging HIV population. “We currently have submitted [new drug applications] and [marketing authorization] applications in the U.S. and EU respectively, and we have a [Prescription Drug User Fee Act] date for this coming November in the U.S., so we hope to receive regulatory approval.”
The company is also collaborating with Janssen on other TAF-based regimens, and submitted U.S. and EU applications for a TAF-based regimen that could potentially replace Truvada earlier this year.
Hematology/oncology pipeline
A new key area of investment for Gilead is hematology and oncology, for which they are investigating multiple mechanisms of action, such as kinase inhibitors, with a focus on combination therapies, Washington said. Of about 30 ongoing trials, “10 or so are in phase 3.”
Zydelig was Gilead’s first oncology launch in July 2014, which is currently marketed to very sick “double refractory” patients, but the company’s focus on ongoing phase 3 trials is “to ultimately move treatment to patients who are not as sick,” according to Washington.
Phase 3 studies in gastric cancer are anticipated to be initiated in the third quarter (Q3) of 2015. “There is lots of investment, and lots of opportunity to focus specifically in areas of unmet medical need where we think we can shift the paradigm for treatment of cancer patients,” she said.
Liver disease
Core and emerging markets for HCV are estimated at 4 million patients in the U.S., 2.6 million in the European markets and 1.1 million in Japan, Washington said.
There has been “a nice ramp of uptake relative to usage” since the launch of Harvoni and Sovaldi in December 2013, Washington said. As of March 31, 2015, about 260,000 patients have been treated, or 4% of the estimated population just in core markets. “There is a lot of discussion around the stability and the longevity in the hepatitis C market, but we clearly think relative to budget and the number of patients to treat, that that market will be around for decades to come.”
Harvoni launched in December 2014, and with $3.6 billion in first quarter sales, a lot of Gilead’s HCV treatment revenue has “shifted to Harvoni,” Washington said.
The company is also “making great progress” in Japan, she said. Sales have begun for Sovaldi, which was approved in March, though of the 1.1 million patients, about 30% are genotype 2 “and have no treatment options today.” The company submitted a new drug application in September 2014 for Harvoni and anticipates approval “hopefully in Q3 of this year.”
Even with the success to date, research and development efforts are focused on a pangenotypic treatment, and shorter durations, she said.
Milligan discussed how Gilead will be focusing on gaining approvals for HCV drugs in Europe.
“The U.S. is going extraordinarily well, better than we predicted few years ago,” Milligan said. “Outside of the U.S., there is still ample growth opportunity. Sovaldi is now on [the] market in all countries and Harvoni is making its way through approvals with France, Italy and Spain. We have really interesting prospects.
“Europe has been very committed to treating patients and want to pay more money to treat more patients,” Milligan said. “Italy has over 1 million people with HCV; it is quite a problem. We need to tackle that one as quickly as we can. Even with aspirations with government, it will take 20 years to treat all [of] them, so we will continue to go in [the] future. The political will is there and [we are getting] positive feedback from governments.”
Milligan further stated the company has already doubled last year’s first quarter numbers of treating patients with Harvoni and revenues are expected to grow.
“Last year we treated about 140,000 people in the U.S. [with Harvoni] and in the first quarter of this year, we’ve treated 70,000 patients in the U.S., so this puts us on a rate that nearly doubles last year’s if we continue at this pace and there is no reason to think we won’t,” Milligan said. “It is higher than we predicted.”
In addition to HCV, the company is also spending “significant [research and development] dollars … on other areas in liver disease,” such as nonalcoholic steatohepatitis, estimated to affect more than 12 million people in the U.S., and hepatitis B virus, “which actually has a prevalence double that of hepatitis C,” Washington said. – by Adam Leitenberger and Melinda Stevens
Disclosures: Washington and Milligan report that they are employees of Gilead.