Gilead Cancer Drug Trials Got Suspended

The Foster City biotech giant has suspended the trials of its drug on account of safety issues.

Immediately after the biotech giant, Gilead Sciences announced the termination of the clinical trials on Zudelig –its cancer drug that the investment bank Leerink slashed the price target of the biotech titan on Wednesday. The trials were cancelled due to safety problems.

Last Friday, the European Medicines Agency (EMA) announced that it had been looking into the reports which have indicated the negative side effects leading to death in the biotech’s trials on its cancer drug tested in varied form of blood cancer. Subsequently, the U.S. Food and Drug Administration announced that it had been carrying out the similar activity and on Monday it released a notice which says that the Foster City, Calif. firm had decided to suspend the six trials in patients with indolent non-Hodgkin lymphomas (NHLs), chronic lymphocytic leukemia (CLL), and small lymphocytic lymphoma (SLL) who have failed other treatments. The Gilead’s drug Zydelig was launched by the company in July 2014. It has been approved as third-line treatment for B-cell NHL and SLL and for relapsed CLL.

The agency cited the following in a statement: “The FDA is reviewing the findings of the clinical trials and will communicate new information as necessary.” A spokesman for the $122 billion organization, Nathan Kaiser, said in an e-mail on Tuesday that the company has been “conducting a comprehensive review of all ongoing studies” while contemporaneously having appropriate consultations with regulatory authorities. Moreover, Kaiser didn’t disclose the number of patients who suffered from serious side effects or who died during the trial. The Foster City company expressed that it’s trials of cancer drug as a front-line treatment for any cancer are also been suspended.

In the view of above mentioned events of drug’s trial suspension, the Leerink analyst, Geoffrey Porges slashed the price target from $130 to $127. He also brought down his estimation of annual sales of the drug to $174 million from colossal $935 million in the year 2020. He has further speculated that in the event where the sales will be minimum the EPS of the company will cut by the range of 1% to 3% in the period covered in 2017-2020.

Porges wrote, “Though accretive to revenue, oncology accounts for a small portion of Gilead’s total revenue, 93% of which consists of antivirals. We have never been convinced that oncology would become a major franchise for the company, and given these recent events, maintain this outlook.”