Mylan (NASDAQ:MYL) announced on Tuesday that it has entered into a global partnership with Gilead Sciences (NASDAQ:GILD) to manufacture and distribute remdesivir in 127 low- and middle-income countries as a treatment for COVID-19. Remdesivir showed promise against the novel coronavirus in late-stage clinical studies.

Why the deal happened

Because of the urgent nature of the pandemic, Gilead has indicated its desire to make remdesivir widely available as quickly as possible, and partnering with Mylan will help it accomplish that goal. The pharmaceutical companies have worked together for 15 years in their efforts to fight other infectious diseases including HIV and hepatitis C. Remdesivir is the 10th drug licensed by Gilead to Mylan.

Magnifying glass on top of blocks spelling out remdesivir

Image source: Getty Images.

Mylan brings to the table a global infrastructure and technical expertise in manufacturing injectable drugs that likely appealed to Gilead in this case. The drugmaker also has plenty of experience navigating the supply chain issues that can crop up when producing and delivering drugs to developing countries.

What's next

Mylan plans to develop a bioequivalent version of remdesivir and produce its own active pharmaceutical ingredient for the drug. The company expects to be able to provide remdesivir to India and other countries in the next few months, pending reviews by the regulatory agencies in those countries and a prequalification from the World Health Organization.

The agreement that will allow Mylan to produce the drug for low- and middle-income countries is non-exclusive, so Gilead can still sign up other licensees to manufacture and distribute remdesivir for use in treating COVID-19 patients across the world.