If Gilead Sciences'
Relative to the year-ago quarter, product sales didn't look all that bad -- up 24% -- but they still missed analysts' expectations. Like Eli Lilly
While some drugmakers would be envious of 24% growth, investors are rightfully skeptical that Gilead can keep it up with the current offerings. And besides, the sales will be lost to generics eventually. In order to satisfy investors, Gilead has to make progress developing new drugs.
Unfortunately, it looks like another one may be biting the dust. On Monday, Gilead said that it was stopping a phase 2 trial testing its hepatitis C drug, GS 9450, because of high undisclosed adverse events, which seem to be backed up by laboratory data. The company hasn't made a final decision about the drug, but things aren't looking particularly good for the compound.
The hepatitis C drug failure follows Gilead's attempt to diversify into heart drugs with its blood-pressure drug candidate, darusentan. The drug seemed to work in a phase 3 trial although the side effect profile was questionable. After a second phase 3 trial failed to meet its efficacy endpoint, Gilead decided it had had enough and dropped the program.
The only thing that seems to be going well for Gilead's pipeline is its mainstay HIV drugs. A partnership to develop a cocktail drug with Johnson & Johnson
Those HIV drugs should help Gilead stay ahead of competitors in the HIV space. Remember, GlaxoSmithKline
Fortunately Gilead is still a cash-generating machine with $670 million in operating cash flow during the quarter. The $4.6 billion it has in the bank is more than enough to buy a few pipeline candidates and try its hand at diversification again.
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