The latest news is positive, but …
For some reason, remdesivir seems to get a more negative press than data carriers.
Note: I use “RDV” for remdesivir, which Gilead (GILD) does internally, and I say “COVID” instead of COVID-19.
Now for the latest news and the media reaction:
The results of an NIH-sponsored study were summarized in the NEJM Friday. A supplement to the article contains valuable information on the study design and clinical data.
NIH issued a press release concurrent with the online publication of the NEJM article. It was titled Peer-reviewed data shows that remdesivir for COVID-19 improves recovery time. NIH said in part:
… The results support remdesivir as a standard treatment for patients hospitalized with COVID-19 and requiring additional oxygen therapy…
I think the results as well support the use of RDV in all hospitalized patients with pneumonia (or associated lung disease) due to COVID, although an argument could be advanced against its initiation in patients already on artificial ventilation (category 7 in study terminology). In this sense, the wording of the NIH was a little cautious in not mentioning the RDV for category 4 patients with COVID (i.e. not on supplementary oxygen).
Some media have presented a more negative view of RDV. CNN reported (not underlined in the original):
Researchers finally released data that led the federal government to recommend the use of antiviral drug remdesivir in very sick coronavirus patients, and they say medication alone will not help patients.
CNN could have referred to the point raised in the Discussion section that a 7% mortality rate was too high, and remdesivir may well be improved by adding a second drug.
But look at the concise conclusion that the investigators actually wrote in the article:
Remdesivir has been shown to be superior to placebo in reducing the recovery time in adults hospitalized with Covid-19 and signs of lower respiratory tract infection.
This finding seems inconsistent with CNN’s statement that “the drug alone will not be enough to help patients”. Investigators believe the drug – only – helps patients recover faster.
This is different from a remedy, and as with some other viral diseases, combination therapy can improve RDV alone.
Another example of media negativity was In search of Alpha post on Friday evening, Study shows drug Gilead only helped patients on oxygen.
I do not agree with this statement. Trends for Category 4 patients suggest that the RDV is helping them. This key point is discussed in more detail below.
A few weeks ago, a prominent example of a flip-flop of moving appointments in the market is Financial Times. I discussed this in a May 4 article:
Who remembers this news?
April 23 (Reuters) – Gilead Sciences Inc.’s experimental coronavirus drug failed its first randomized clinical trial, the Financial Times reported: the antiviral drug Gilead remdesivir flops in the first trial Thursday, citing draft documents accidentally published by the World Health Organization.
The Chinese trial showed that antiviral remdesivir did not improve the condition of the patients or reduce the presence of the pathogen in the bloodstream, the report said. ”
GILD protested at the time that this interpretation was misleading, but few heeded his warning. However, when the article was published last week in The Lancet, the data shows that the Financial times the article was indeed misleading.
Recurring negative news articles on RDVs may not be good for GILD’s actions in the short term … but to the extent that they promote sales, they can be good for keen patients over time.
It is disconcerting that a drug for our modern COVID scourge that obtains an NIH seal of approval generates negative headlines.
Before continuing, there are a few caveats.
This article expresses my opinions based on what I see in the NEJM additional article and appendix, and other information and analysis. I tried to get the right data, but unintentional errors could be present in this article. Please take my presentation as a source for your own research. Other points of view and data exist and must be taken into account when thinking about the appointment, COVID treatments and GILD actions.
Please consider reading the terms of study supplement carefully, which “summarizes the preliminary results of this ongoing trial.”
We have not seen the very final analysis of this study.
The science can evolve quickly here, whether it is ultimately drug therapies superior to RDV and / or a widespread, effective use of a vaccine that can significantly limit the need for therapies. These and other risks to RDV’s commercial success may exist. And as always, regardless of RDV’s success as a profit center, holding GILD shares involves many risks. Please consult GILD’s 10-K and 10-Q for the delineation of many of these risks.
An overview of some of the key data
The NIAID / NIH study randomized 1,063 hospital patients with COVID and defined them as falling into 4 categories of increasing disease severity. In summary, by category (the definitions are not precisely those used in the study and are simplified for convenience):
- 4: pneumonia, not requiring additional oxygen
- 5: pneumonia, requiring additional oxygen
- 6: pneumonia, requiring additional oxygen and also requiring non-invasive ventilation assistance (I probably assume BiPAP or CPAP)
- 7: depending on the ventilator, intubated or on ECMO.
Categories 1 to 3 were the post-enrollment apparent healing levels of COVID.
Category 8 was death.
The primary endpoint was recovery time.
The data favored RDV. The RDV group had a shorter recovery time of 11 days, compared to 15 days with the placebo. The trends favored RDV for patients in categories 4, 5 and 6. The results in the most severe category, # 7, were similar between RDV and placebo.
The data tended better for RDV than placebo in category 4, with a very good ratio of 1.38 in favor or RDV, and were close to the ratio of 1.47 observed in category 5.
There were not many patients in category 4, and the 95% confidence interval (“CI”) had a wide range: 0.94 to 2.03. Because the CI fell below 1.00, investigators could not conclude that Category 4 patients were benefiting from it, but the trend was that they did.
I believe it is likely that Category 4 patients have been helped by the RDV, and that we will learn more soon (see below).
Note, the investigators did not exclude Category 4 patients in their summary conclusion of the study results.
Grade 3 or 4 serious adverse events were more common in the placebo group. This result supports the view that RDV was safe and effective.
A key secondary endpoint was the improvement of the ordinal scale to 8 categories. This also favored RDV.
Mortality data deserve their own section.
Mortality trends favor RDV over placebo
With hindsight, it is possible to criticize the hasty study of NIAID as imperfectly planned, because it aggregates the data of a low-risk group (category 4) with two intermediate levels of greater severity (categories 5-6) up to ” for seriously ill patients on artificial ventilation (category 7). My opinion is that if GILD and other researchers had had time to follow a normal drug development program, it would have started with phase 2 studies in category 5 and category 6 patients. Category 5 patients would then have led to a study in the lower risk category 4 group. Favorable results in high risk and very sick category 6 patients could similarly lead to a study in very high risk category 7 patients.
Thus, it is important to understand the urgency of this study, which combines patients from extraordinarily different risk categories in the aggregated data.
It is important to note that the study was not designed to detect a difference in mortality.
Yet the results are encouraging, especially in category 5 – where patients may be sick enough to have a significant risk of dying but the disease is not advanced enough to be too late for an antiviral medication to make a difference .
Overall, the RDV group, using a certain type of statistical analysis (Kaplan-Meier estimate), had a mortality rate of 7.1% after 2 weeks, compared with 11.9% for the placebo group. This gives a risk ratio of 0.70, with a 95% CI of 0.47 to 1.04.
The fact that the CI only slightly exceeds 1.0 means that the statistical significance was not quite present, but the trend is clear.
With regard to category 5, as shown in table 2 (table at the bottom of the table), there were only 4 deaths (2%) in the RDV group versus 20 deaths (12%) in the placebo group .
Whereas in the milder category 4 group, there was only one death in each of the RDV and placebo groups (2%), and no one in the RDV group progressed to need a mechanical ventilation versus 4% in the placebo group.
Much higher mortality rates were observed in very sick categories 6 and 7 patients, with little difference between RDV and placebo.
Do that kind of post hoc the analysis is risky, but we are here in a pandemic with limited data. I’ll just say that I think RDV reduces mortality in Category 5 patients, and possibly in Category 4 and 6 patients.
Obviously, the issue of mortality would benefit from additional, targeted and larger research. That matters a lot to GILD’s pricing flexibility with RDV when it starts charging for the drug, and I don’t offer any prediction on how this drug will actually be assessed and reimbursed.
Imbalances between groups
The placebo group had a slightly higher (worse) ordinal score on entry. The authors adjusted for this and found slightly fewer benefits for the RDV after this adjustment, but not enough to affect their pro-RDD conclusion.
However, there was evidence that the RDV group was sicker in some respects than the placebo group.
RDV groups had (slightly) higher percentages of:
- coronary artery disease
- chronic pre-COVID oxygen therapy
- chronic kidney disease
The placebo group had higher percentages of patients with chronic lung disease not on oxygen therapy and immune deficiency.
A higher percentage of patients had no comorbidities in the placebo group than in the RDV group.
See table S1, p. 21 in the additional appendix for these details.
I would like to see the primary data adjusted for these preexisting comorbidities, especially for patients in categories 4, 5 and 6.
This could reveal more solid data in favor of RDV.
Correlation with the study on China
As mentioned above, the trends of the partially completed study in Wuhan / Hubei Province were positive in a direction similar to that of the NIH study.
Two studies in different patient groups, with different adjunctive treatment practices, do not allow a formal meta-analysis.
However, there are now two blinded, placebo-controlled studies of RDV during this crisis period, and the results are in line with the trend that the drug accelerates the recovery of COVID.
To date, in record time, two studies have been completed, published in major medical journals, and are consistent in favor of the assumption that RDV is safe and effective in the treatment of COVID inpatients.
What is RDV worth, and will GILD make money?
As mentioned above, I don’t want to guess what GILD will ultimately achieve per treatment cycle for RDV. I expect it to be well above $ 1,000 per treatment.
The next important step will be regulatory approval in the United States, the United Kingdom and the EU.
Some have suggested that GILD develops its appointment without thinking of profit. however, Stat news reports that GILD recently started a fireside conversation with veteran analyst Geoffrey Porges of SVB Leerink, and hopes that RDV will become at least a 1-2 year opportunity, and most likely a multi-year profit center. The latter possibility is something I have already used to give RDV a current value adjusted for high risk.
For expert commentary on the issue of mortality benefits and other matters, see another recent report. Stat news article.
Why did GILD give an appointment?
A complete answer must of course come from the company.
I guess there are three main reasons. One would be that GILD did not yet know how effective the drug was, so it did not know how the price would work. The second reason would be that since RDV is now widely used, doctors, hospitals and insurers can judge for themselves how it works. The last reason would be that any RDV currently has an emergency clearance to use by the FDA, rather than a full and regular marketing approval.
Moving on to licensing, GILD does with RDV what it does with its HIV and HCV drugs: it grants technology and patents to generic manufacturers for manufacture and sale in countries poor. I believe that GILD has reached the threshold of these charitable activities and deserves the credit for having done so. I am not aware that other companies do this regularly.
Conclusions – The commercial potential of RDV is gradually becoming clearer
I believe COVID-19 has a new standard of care, RDV, and the FDA will approve it, whether as standard or expedited approval. I think that, and similar action from the EU and the UK, will be important for GILD to market the RDV.
Regeneron (REGN) said in his last conference call that if this happened, he would test his cocktail of antibodies in addition to RDV in hospital patients.
This posture is positive for the commercial potential of RDV.
GILD indicated during its last conference call that it was working on a subcu version of RDV as well as the more inhaled version.
More information will be available soon: GILD plans to publish the results of its RDV study of what amounts to Category 4 patients in about a week. This is a placebo-controlled study. It is opened due to a shortage of placebo IV infusion kits. These and other questions will help us learn more about the true value, or lack thereof, of the appointment.
From the stock market point of view, RDV has become the tail that moves the big dog GILD.
This is a situation that should pass. RDV was “sitting on a shelf” and is not essential to the future of GILD.
This future is most closely linked to her HIV franchise and the challenge posed by ViiV. It is also probably less, but still important, related to his various efforts in oncology, collaboration with the Galapagos (GLPG) and other subjects.
Personally, I own GILD with a multi-year perspective, taking as an example the many years it took Roche (OTCQX: RHHBY), where the CEO of GILD headed the dominant biotechnology division, to excite investors. For now, the dividend is enough.
In summary, the New England Journal of Medicine On Friday, after the market closed, an article concluded that remdesivir, or RDV, was superior to placebo to shorten recovery time (a standard measure of antiviral efficacy) in adults hospitalized with COVID-19 and pulmonary disease .
This finding was not changed only for category 5 or for patients receiving supplemental oxygen (category 4, where the RDV showed very favorable trends).
Additional studies, using larger patient subgroups, would be very useful to define the effectiveness of the RDV in different levels of COVID severity and when examining comorbidities, the duration of the disease before starting the treatment, etc.
Other approaches, such as the antibody treatments that REGN and others are rapidly developing, may be additive to RDV in hospitalized COVID patients and may be effective as single-dose treatments for outpatients.
All those who participate in the organization, execution and analysis of these rapid-fire clinical trials, carried out under exceptionally difficult and demanding conditions, deserve our respect and gratitude.
Thank you for reading and sharing your comments.
Submitted on Saturday afternoon.
GILD closed Friday at $ 73.34.
Disclosure: I am / we are long GILD, RHHBY, REGN. I wrote this article myself and it expresses my own opinions. I do not receive any compensation for this (other than from Seeking Alpha). I have no business relationship with a company whose stock is mentioned in this article.
Additional disclosure: No investment advice. I am not an investment advisor. REGN and RHHBY are held in IRAs and may be sold at any time without notice. I do not intend to stop owning GILD.