Gilead Sciences, Inc. (GILD), which has been in the eye of the storm with lawmakers in the U.S. questioning the pricing of its recently approved potential blockbuster hepatitis C virus (HCV) treatment, Sovaldi, received encouraging news from the EU. Gilead’s efforts to get its once-daily fixed-dose HCV combination therapy – ledipasvir (NS5A inhibitor) plus Sovaldi (nucleotide analog polymerase inhibitor) – approved in the EU appears to be on track with the European Medicines Agency (EMA) validating the biopharmaceutical company’s marketing application for the candidate.
The EMA accepted the company’s request for an accelerated assessment of the application, which seeks marketing approval of the all-oral cocktail therapy for treating adults suffering from the genotype 1 version of chronic HCV. Acceptance of the request has reduced the EMA’s review period of the application by two months.
Gilead filed the marketing application on the basis of encouraging data from three phase III studies (ION-1, ION-2 and ION-3). The studies evaluated the combination with or without ribavirin in almost 2000 genotype 1 chronic hepatitis C patients. Approval of the combination would not only reduce the treatment duration of chronic hepatitis C genotype 1 infection significantly but also eliminate the need for interferon injections or ribavirin, which have significant side effects. Furthermore, the combination would become the first oral treatment for HCV patients with genotype 1 infection to be available in the EU following approval. Gilead stated that majority of the HCV affected population in the EU suffers from the genotype 1 version.
Approval for the combination has also been sought in the U.S. and Canada. We note that AbbVie (ABBV) is also aiming to bring an all-oral, interferon-free therapy into the market for treating genotype 1 HCV.
Though pleased with the regulatory update on the combination of ledipasvir and Sovaldi, we believe that investor focus will remain on Gilead’s response to the letter issued by the Congress’ Committee on Energy and Commerce last week expressing concerns about the exorbitant price tag ($84,000 for a 12-week treatment period) attached to the drug. Since HCV is more prevalent in the low-income strata of the society, Gilead’s pricing policy has attracted severe criticism. Gilead will have to submit a response by Apr 3.
Gilead carries a Zacks Rank #1 (Strong Buy). Alexion Pharmaceuticals, Inc. (ALXN) and Alkermes (ALKS) are examples of biopharma stock carrying same rank as Gilead.
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