With Gilead Sciences' (GILD 1.06%) drug magrolimab now under a partial clinical hold with the U.S. Food and Drug Administration, how big of a setback could it be for the company? In this segment from "This Week in Healthcare," recorded on Jan. 31, Motley Fool contributors Brian Orelli and Keith Speights discuss what's at stake for investors as more news comes in on magrolimab.
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Brian Orelli: The FDA put Gilead Sciences' magrolimab on partial clinical hold. This is a drug that targets CD47 that it got from its acquisition of a company called Forty Seven. How big of a deal is this for Gilead? Then there are a ton of other companies that are also developing drugs that target CD47. How do you think this might affect Gilead's competition?
Keith Speights: Brian, what's happened here is that there seems to be an imbalance between the numbers of suspected unexpected adverse serious adverse reactions that were reported by investigators in different arms of Gilead's clinical trials of magrolimab. This partial clinical hold by the FDA means that patients in the studies who are already receiving this experimental drug can continue doing so. However, Gilead will not screen or enroll any new patients while this partial hold remains in effect.
I think it's really just too soon to know how big of a deal this might be for Gilead. Investors as a whole seem to realize that as well, Gilead's shares fell 2 percent or so after this news broke last week, but it rebounded within a couple of days. I think investors know that. We just don't know yet on how big of a story this is for the company. If there are serious issues with magrolimab though, I think it'll be a big setback for Gilead. The company paid $4.9 billion to acquire Forty Seven in 2020. magrolimab was the crown jewel in that deal. If this drug just doesn't pan out for whatever reason, then that's a big setback for Gilead Sciences.
Then of course, if magrolimab has big problems, there's at least a reasonable chance that other anti-CD47 therapies could also, you mentioned that there are quite a few out there just some that come to mind that are developing similar therapies, Pfizer bought Trillium Therapeutics last year for nearly 2.3 billion dollars to get its anti-CD47 program added to its pipeline. AbbVie and Boehringer Ingelheim are a couple of other big drugmakers without anti-CD47 programs that they forward through licensing deals. Of course, there are quite a few others. If Gilead has bad news, that bad news could ripple throughout the industry.
Brian Orelli: Yeah, it's disappointing that we don't know what the serious adverse events are. Because that would maybe take some stabs at whether it's a class effect or not. But at this point, we just don't know.
Keith Speights: Yeah, I think the only reading between the tea leaves here, the only thing we can look at as a positive is that it was a partial clinical hold instead of a full clinical hold, so that at least, to me, gives a hint anyway that it may not be too terribly bad if the FDA is still OK with existing patients continuing to receive treatment.