GILEAD / GALAPAGOS
Now that filgotinib’s path to the US market is definitely closed in RA, it is time to take a step back and review filgotinib’s market opportunity as this new development could have a broader impact on its commercial perspectives. Even though it is believed that Gilead is still fully committed to the IBD & Crohn’s Disease market.
The future will be in inflammatory bowel conditions where for now Gilead is pushing on.
Rights have been handed back in RA, psoriatic arthritis, ankylosing spondylitis and non-infectious uveitis.
While Gilead remains committed to the partnership and inflammation, most analysts get the sense that the company is more focused on oncology with the recent acquisitions of Immunomedics and Forty Seven.
While we have been told in the past that MANTA data (assessing filgo’s testicular toxicity) was not needed to submit in the US, the understanding from last August CRL is that 26-week follow-up data was now going to be necessary. Following the Conference call, it now appears that it is very likely that FDA will ask to see up to one year recovery period after the 26-week data. The further we go, the less clear the path seems which is all the more worrisome considering that the rest of the US commercial opportunity is at stake.
As US commercial opportunity fades away this new uncertainty is very unwelcome as it may be another reason for Gilead to put an end to filgotinib’s US journey.
Gilead and Galapagos disclosed that the FDA now wants to see 52-week follow-up forpatients in the MANTA/MANTA-RAy studies that had a >50% decrease in semen parameters by week 26. Data for week 26 will be available by mid'21 and was supposed to sufficient for continuing the review in RA and future indications. As a consequence any decision on the future of Jyseleca in the US for IBD is now likely to come in 2022.
Galapagos CMO noted that there was an un-blinded group looking at the MANTA/ MANTA-RAy data that will communicate with the EMA and regulators in Japan, where filgotinib gained approval and patients are being treated with the drug, to ensure any safety signal from the MANTA studies is relayed to these agencies. It's not clear if a safety signal is seen, if there is risk to filgotinib in these markets but this puts even more importance on these studies.
Gilead has decided to retain worldwide rights outside Europe but should the toxicity concerns be confirmed, a complete exit from this product is surely inevitable.
Even though Galapagos Market cap is approximately equal to its current cash position, the uncertainties remain. It is fair to doubt Gileads commitment as it has shown in the past it is capable of making ruthless decisions if needed.
Some observers also question how independent Galapagos now really is, because of the deal made last year it gave Gilead two members on the board who could “potentially veto anything they don’t like”.
Galapagos funds and leads all discovery and development autonomously until the end of Phase 2. After the completion of a qualifying Phase 2 study, Gilead will have the option to acquire a license to the compound outside Europe. If the option is exercised, Galapagos and Gilead will co-develop the compound and share costs equally. Gilead will maintain option rights to the programs through the 10-year term of the collaboration and for up to an additional three years thereafter for those programs that have entered clinical development prior to the end of the collaboration term. For all other programs resulting from the collaboration, Gilead will make a $150 million opt-in payment per program and will owe no subsequent milestones. Galapagos will receive tiered royalties ranging from 20-24% on net sales of all products licensed by Gilead in all countries outside Europe as part of the agreement.
Criticism of Gilead by Van de Stolpe.
Perhaps Gilead, says Van de Stolpe, should have chosen a different strategy and only asked for approval for the high dose (200mg). Then the FDA would not have compared the two doses and judged the high dose on its own merits. Approval of only the high dose would have offered sufficient prospects to compete with similar drugs, precisely because they have so far only been allowed in the lower doses in the US.
This criticism of Gilead's strategic choice, however cautiously formulated, is remarkable. The activities of Galapagos and Gilead have been closely intertwined since the two companies entered into an intensive partnership last year.
Van de Stolpe would not be Van de Stolpe if he also could not spot a bright spot. In this case, it is the fact that Galapagos has now acquired all European property rights to filgotinib.
It means that Gilead is leaving the marketing in Europe to Galapagos. 'That's a really great step. We can now make all the decisions ourselves, without ending up in a viscous consultation structure.'
Van de Stolpe: I don't worry about the stock price. I've been in this world too long for that. The stock price is currently of less strategic importance. We have enough cash in hand if we want to make acquisitions, we don't have to issue shares for that. Van de Stolpe does notice some unrest among the employees. The next 2 years will be crucial, according to Van de Stolpe.
Whether the Gilead/Galapagos deal proves inspirational in the future will depend on how many of Galapagos’s drug candidates actually succeed.