Gilead's CAR-T Therapy Yescarta Slowly Getting Off The Ground

Slow and steady approach to launch should position Yescarta well in the long run, Gilead maintains – the CAR-T therapy brought in $7m in its first month. But Gilead is still suffering from the decline in hepatitis C.

Gilead Sciences Inc.'s measured launch of the chimeric antigen receptor T-cell (CAR-T) therapy Yescarta is proceeding as expected, with 28 cancer centers in the US now ready to provide the treatment and $7m in sales for the fourth quarter.

Jefferies analyst Michael Yee said in a same-day note that Yescarta sales were higher than expected, considering they reflected only about one month on the market.

Yescarta (axicabtagene ciloleucel) was approved by FDA in October for relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy. (Also see "Gilead/Kite Pricing For Yescarta Undercuts Novartis's CAR-T Kymriah" - Scrip, 18 Oct, 2017.) European approval is expected in the first half of this year.

The product will one day need to earn its keep, as Gilead picked up the asset at high cost via its acquisition Kite Pharma Inc. for $11.9bn, or $180 per share, in August 2017. (Also see "What's Gilead Getting From Kite For Nearly $12bn?" - Scrip, 29 Aug, 2017.)

In its Feb. 6 fourth quarter and full year 2017 earnings report, Gilead reported $7m in sales for Yescarta. Sales were included in the company's "other product" sales category, along with Letairis (ambrisentan), Ranexa (ranolazine) and AmBisome (amphotericin B for liposome injection). This category brought in $624m for the fourth quarter of 2017 compared to $621m for the same period in 2016.

As of the end of January, 28 cancer centers in the US were authorized to provide the treatment. By mid-2018, the company aims to reach institutions responsible for treating 80% of the 7,500 eligible patients.

Through the Kite Konnect program, the company is aiming to help patients and providers with enrollment, reimbursement and logistics.

Access and reimbursement are consistent with prelaunch expectations for new therapies in the in-patient hospital setting, the company reported.

As centers get better with handling patients and payment, it gets easier to bring in new patients in for treatment – momentum is slowly growing at each center as it gets up and going, CEO John Milligan told the call.

The first-mover advantage in this indication is very important, Milligan said. There is a lot of paperwork involved in getting set up as a center to administer the complex autologous treatment, including getting up to speed with the Risk Evaluation and Mitigation Strategy (REMS) program mandated by the US FDA as a condition for approval.

This has to be duplicated for each individual agent coming to the market.

"It is more difficult to get the attention of the centers once they have something that works very, very well, which we believe they have with Yescarta. That is an important thing to consider," Milligan said.

Gilead has previously guided for a controlled launch to ensure that centers are comfortable administering the therapy, so that patients may safety receive it.

In its third quarter earnings report, Gilead had reported that 16 cancer centers were completing training for safe use of the drug and that the company was working toward an ultimate goal of 70 to 90 qualified US cancer centers. (Also see "Gilead Says 16 Cancer Centers Getting Ready To Administer Yescarta" - Scrip, 26 Oct, 2017.)

"We do see a slowly growing momentum at each center as they get up and going. So obviously, the second half of this year will be better for enrolling patients than the first half," Milligan said.

Meanwhile, the company is looking to expand labeling into earlier lines of therapy, exploring combinations with other immuno-oncology (IO) agents and considering new collaborations and acquisitions to access technologies, including gene editing, that will take CAR-T to the next level.

In December, the company announced the acquisition of Cell Design Labs Inc., with a $175m upfront payment. Cell Design Labs has developed proprietary technology platforms for engineering CAR-T therapies. (Also see "Gilead Acquisition Of Cell Design: The Next Logical Step" - Scrip, 8 Dec, 2017.)

Gilead is looking to develop cellular therapies that can achieve greater responses, lessen side effects and increase the number and type of malignancies that can be treated. The company is interested in moving from autologous to allogenic, meaning off the shelf, approaches and to lower the incidence of cytokine-release syndrome, a life-threatening adverse event, and neurotoxicity.

"We are going to spread out our bets a little bit investing in various different technologies. Because it is hard to predict which will have the breadth to be important and also the specificity and depth of response that is going to be important," Milligan said.

HCV Sales Still In Freefall

Gilead needs new blood to rejuvenate sales. The Foster City, Calif. company reported $5.8bn in product sales for the fourth quarter of 2017, down from $7.2bn from the year-ago period, and $25.7bn for 2017, down from $30.6bn in 2016. The negative change was caused largely by declining sales of its hepatitis C virus (HCV) franchise, but the drop in its antiviral business was partially offset by rising sales for its new HIV combination products including the tenofovir alafenamide (TAF) backbone.

Gilead reported a net loss of $3.9bn in the fourth quarter, or $2.96 loss per share, compared to net income of $3.1bn, or $2.34 per diluted share for the same period in 2016. That includes an estimated $5.5bn charge related to the enactment of US tax reform.

The company reported $1.5bn in HCV sales for the fourth quarter, down from $3.2bn during the same period in 2016.

HIV and hepatitis B virus product sales rose to $3.7bn in the quarter, up from $3.4bn in 2016. Sales were driven by continued uptake of TAF-based products, including Genvoya (elvitegravir/cobicistat/emtricitabine/TAF).

Jefferies' Yee viewed the quarter as in line with expectations, with no major surprises.

The company is guiding for $20bn to $21bn in product sales for 2018, which is "slightly below sell-side consensus" of $21.5bn, Yee noted.

For its HCV franchise, the company is guiding for sales of $3.5bn to $4bn in 2018.

New products in the HCV markets have been disruptive, but going forward, the company doesn’t see any further new entrants causing further disruptions.

The number of new HCV patient starts will continue to decline, but more slowly than in the past and HCV market share vs. competitors will stabilize by the middle of the year.

"Given these changes, Gilead's HCV revenue should be a more predictable, albeit smaller, piece of our financial story," Miligan said.

That will enable to the company to focus on positive new trends, like the continued uptake of HIV TAF-based regimens and short and long-term growth for Yescarta and other new products, he said.

Gilead expects FDA will approve its new fixed-dose HIV combination bictegravir/emtricitabine/TAF (B/F/TAF) by or on the user fee date of Feb. 12.

Datamonitor Healthcare forecasts the B/F/TAF combination will be a huge success, with peak sales in major global markets of $5.8bn.