Shares of Gilead Sciences (GILD) have tumbled 20% in the past 52 weeks on numerous reasons including weaker-than-expected quarterly results and a slowdown in the HIV segment. Gilead bulls have been betting on its ongoing research on nonalcoholic steatohepatitis (NASH), a liver disease, to boost topline growth in the future.
However, these hopes and the biotechnology company’s credibility as a whole took a hit on Tuesday when it said it failed to meet the primary endpoint of its most advanced NASH candidate, selonsertib, in a Phase 3 trial.
Compared to placebo, selonsertib failed to elicit any significant improvement in the patient’s health status, even on a high dosage. The phase 3 trial was done on about 900 patients for 48 days.
GILD shares fell 4.3% during regular trading hours on Tuesday. Meanwhile, rivals Viking Therapeutics (VKTX) and Madrigal Pharmaceuticals (MDGL) – who are also in the race to bring out a NASH drug – saw their stock jump 6% and 3.6% respectively on the news.
The clinical trial results were so weak that Gilead may pull the plug on the drug’s development altogether. There are other investigational NASH drugs in Gilead’s pipeline, but these will take time to reach the market, in case they come out of the trials successfully. And there is a likelihood that one of the rivals reach the market first.
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With Gilead losing out, Intercept Pharmaceuticals (ICPT) is currently at the forefront in the race, with its Phase 3 clinical trial expected this quarter-end.
Last week, Gilead said it swung to a profit in the fourth quarter from a loss last year, helped by a plunge in income taxes provision. The top line exceeded analysts’ expectations while the bottom line missed consensus estimates. The biotechnology company also guided full-year 2019 product sales in line with the street’s view.