Gilead Sciences, Inc. (GILD) announced that it has entered into an agreement with privately held, Germany-based company, Phenex Pharmaceuticals. As per the terms of the agreement, Gilead will acquire Phenex’s farnesoid X receptor (FXR) program comprising small molecule FXR agonists for the treatment of liver diseases including nonalcoholic steatohepatitis (NASH).
Gilead intends to advance the FXR program into clinical development as soon as possible. Under the terms of the agreement, Gilead will make an upfront payment and additional milestones payments based on certain development targets of up to $470 million to Phenex.
In its press release, the company stated that NASH is estimated to affect 10% to 20% of the people in the developed world. Currently, there are no approved treatments for NASH.
Our Take
We are pleased with Gilead’s agreement with Phenex to develop treatments for liver diseases including NASH. We believe if successfully developed and eventually approved these drugs will complement Gilead’s portfolio, which includes hepatitis C virus (HCV) infection drugs – Sovaldi and Harvoni.
Gilead’s blockbuster drug, Sovaldi, has generated almost $8.6 billion in the first nine months of 2014 and its new drug Harvoni (approved in Oct 2014) was also received well. Last month, AbbVie Inc.'s (ABBV) Viekira Pak gained FDA approval for the treatment of patients with chronic genotype 1 HCV infection including those with compensated cirrhosis.
Gilead holds a Zacks Rank #4 (Sell). Some better-ranked stocks in the health care sector include Affymetrix Inc. (AFFX) and Incyte Corporation (INCY). Both stocks carry a Zacks Rank #1 (Strong Buy).
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