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Gilead tipped to fly high on Kite buy
Posted 29 August 2017
Gilead has finally dug into its war chest and bolstered its flagging pipeline, paying USD12 billion in cash to acquire a promising new gene therapy on the cusp of US approval.
With a substantial war chest, Gilead has been actively looking for a candidate to bolster its pipeline, finally investing a third of its funds into Kite Pharma in what is being dubbed the acquisition of 2017, if not the decade.
Kite's chimeric antigen receptor T cell (CAR-T) candidate axicabtagene ciloleucel (axi-cel) is under consideration in Europe and the US in both diffuse large and primary mediastinal B-cell lymphoma, as well as relapsed or refractory non-Hodgkin lymphoma.
The promising new gene therapy has been granted breakthrough designations in both jurisdictions, and has been rushed through the US approval system under priority review. The FDA decision is due on 29 November.
Gilead's acquisition strongly increases the prospects of axi-cel also being filed in Australia, potentially challenging Novartis in the race to be the first company to bring a CAR-T candidate to the Australian market.
While Gilead has dominated the PBS with its hepatitis C drugs, its shares have been in rapid decline for the past year due to what analysts saw as a lacklustre pipeline and a looming end to its highly lucrative HIV and HCV antivirals.
Gilead revenues topped out in 2015 at USD32 billion but the company's share price began to rally two months ago on rumours it had finally found a purchase target, with the Kite acquisition confirming this.
CAR-T therapies are expected to be the next big thing in immuno-oncology, with Kite's axi-cel having shown in trials it can produce undetectable blood cancer levels in six months. Consequently, Gilead's purchase is being hailed by analysts as "easily the most exciting thing Gilead's done in the past two years".
The acquisition pitches Gilead in a head-to-head battle with Novartis, whose CAR-T candidate tisagenlecleucel is also being considered by the FDA and EMA in B-cell acute lymphoblastic leukemia. The FDA is due to announce its decision on Novartis' application by October 3.
While currently targeting indications with a limited potential market, if Gilead can extend the reach of axi-cell into other areas such as lung cancer, it could have another blockbuster to follow its antivirals.
Kite's CAR-T therapy is considered revolutionary in that it uses genetic engineering to program a patient's T-cells to attack lymphoma and other cancers. It is tipped to come with a very large price tag, and analysts predict Kite's drug could produce worldwide sales of USD1.7 billion within five years.
Gilead is no stranger to successful acquisitions to bolster its pipeline. In 2012 it purchased liver disease drugmaker Pharmasset, providing it with the hepatitis C therapies that have become Australia's top selling drugs.
Megan Brodie
megan.brodie@lushmedia.com.au
Posted 29 August 2017
Gilead has finally dug into its war chest and bolstered its flagging pipeline, paying USD12 billion in cash to acquire a promising new gene therapy on the cusp of US approval.
With a substantial war chest, Gilead has been actively looking for a candidate to bolster its pipeline, finally investing a third of its funds into Kite Pharma in what is being dubbed the acquisition of 2017, if not the decade.
Kite's chimeric antigen receptor T cell (CAR-T) candidate axicabtagene ciloleucel (axi-cel) is under consideration in Europe and the US in both diffuse large and primary mediastinal B-cell lymphoma, as well as relapsed or refractory non-Hodgkin lymphoma.
The promising new gene therapy has been granted breakthrough designations in both jurisdictions, and has been rushed through the US approval system under priority review. The FDA decision is due on 29 November.
Gilead's acquisition strongly increases the prospects of axi-cel also being filed in Australia, potentially challenging Novartis in the race to be the first company to bring a CAR-T candidate to the Australian market.
While Gilead has dominated the PBS with its hepatitis C drugs, its shares have been in rapid decline for the past year due to what analysts saw as a lacklustre pipeline and a looming end to its highly lucrative HIV and HCV antivirals.
Gilead revenues topped out in 2015 at USD32 billion but the company's share price began to rally two months ago on rumours it had finally found a purchase target, with the Kite acquisition confirming this.
CAR-T therapies are expected to be the next big thing in immuno-oncology, with Kite's axi-cel having shown in trials it can produce undetectable blood cancer levels in six months. Consequently, Gilead's purchase is being hailed by analysts as "easily the most exciting thing Gilead's done in the past two years".
The acquisition pitches Gilead in a head-to-head battle with Novartis, whose CAR-T candidate tisagenlecleucel is also being considered by the FDA and EMA in B-cell acute lymphoblastic leukemia. The FDA is due to announce its decision on Novartis' application by October 3.
While currently targeting indications with a limited potential market, if Gilead can extend the reach of axi-cell into other areas such as lung cancer, it could have another blockbuster to follow its antivirals.
Kite's CAR-T therapy is considered revolutionary in that it uses genetic engineering to program a patient's T-cells to attack lymphoma and other cancers. It is tipped to come with a very large price tag, and analysts predict Kite's drug could produce worldwide sales of USD1.7 billion within five years.
Gilead is no stranger to successful acquisitions to bolster its pipeline. In 2012 it purchased liver disease drugmaker Pharmasset, providing it with the hepatitis C therapies that have become Australia's top selling drugs.
Megan Brodie
megan.brodie@lushmedia.com.au
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