Shares of Gilead Sciences (GILD) surged last week, after the company announced that it had ended a late-stage clinical trial of its cancer drug idelalisib earlier than anticipated because it was confident that the treatment was working. Idelalisib is a new treatment for chronic lymphocytic leukemia (CLL) and indolent (slow growing) non-Hodgkin lymphoma (iNHL).
The study for CLL was ended earlier than anticipated, with Gilead reporting that patients treated with the drug lived for a longer time before the continuation of the disease progression or death. A panel of independent monitors not affiliated with Gilead recommended for the company to stop the trial. The trial compared a combination dose of idelasilib and Roche’s cancer drug Rituxan to Rituxan by itself. All the patients in the trial had been treated with various treatments before, but were not suited for more chemotherapy.
Gilead’s announcement dealt a severe blow against Infinity Pharmaceuticals (INFI), which is developing a competing treatment, IPI-145, for both indications.
Gilead’s idelasilib and Infinity’s IPI-145 both function in a similar manner, attempting to inhibit the growth signals in the PI3K signalling pathway. When the PI3K pathway is overactive, cell death is reduced, which allows cancer cells to spread more easily. In addition, Gilead submitted a new drug application for idelasilib last month as a new treatment for iNHL, and intends to file for an approval in the European Union later this year. That double whammy of bad news sent Infinity shares down 14% by the end of last week.
Last quarter, Gilead’s earnings rose to $0.48 per share, a penny higher than the prior year quarter’s earnings. Revenue rose 15% year-over-year to $2.77 billion. Gilead’s bottom line was in line with Wall Street estimates, while its top line topped expectations. Gilead’s main source of revenue is its antiviral (HIV) portfolio, which posted 15% year-over-year growth to $2.31 billion.
The company also has a bright future in hepatitis C treatments with its new drug, sofosbuvir, which analysts believe could be approved as early as next year. Analysts believe that sofosbuvir could hit peak sales of $8 billion due to its milder side effect profile and the fact that it is orally administered, compared to current injected treatments.
Shares of Gilead are already up 81% over the past twelve months, but it still trades with a 5-year PEG of 1.2, indicating strong bottom line growth potential ahead.
Other News About GILD
Gilead Sciences Stops Successful Cancer Drug Study
Gilead’s new cancer drug could arrive ahead of schedule.
Gilead Sciences, Celgene And Other Biotechs Lifted After Citi Report
Big biotechs are getting a lot of love from analysts.
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