Gilead Sciences Inc.'s stock didn't recover fully Monday from the possibly unfair beating it took Friday as the company was making a case for its AIDS-related cytomegalovirus (CMV) retinitis drug to a joint FDA advisory panel.
The Foster City, Calif., company ended with a unanimous recommendation for approval of Vistide, but that came after the market closed and long after NASDAQ halted trading on the stock because of early wire reports suggesting panel members were concerned about toxicity issues. Gilead (NASDAQ:GILD) fell $8.25 to $26.50, or 24 percent, before trading was stopped around 11 a.m. Friday. (See BioWorld Today, March 18, 1996, p. 1.)
The stock gained back some of the loss Monday, finishing up $3.50 at $30 in trading of 4.8 million shares.
Also Monday Gilead said underwriters of its recent public offering exercised overallotment options on 306,000 additional shares at $37.75 apiece, bringing total gross proceeds from the 4.3-million- share-offering to $162.6 million. Gilead now has about $300 million in cash and 28 million shares outstanding.
Lana Lauher, Gilead's manager, corporate communications, said proceeds from the offering will go toward putting a specialized sales force in place for Vistide and continued development of the company's pipeline. Vistide (cidofovir) is Gilead's lead product and the first nucleotide analogue to be recommended for FDA approval.
"We have a deep and broad antiviral pipeline that rivals any in the biotechnology or pharmaceutical industries," Lauher said, adding that Gilead retains worldwide rights to all its compounds.
Craig Parker, a vice president and analyst with New York-based J.P. Morgan Securities Inc., issued a report Monday reiterating a strong buy recommendation with a 12-month price target of $47. He said the strong efficacy data showing Vistide slowed disease progression was obscured by peripheral issues early in the meeting.
The committee recommended a label with no warnings, which should help entry into the marketplace. He said ease of use compared to competing products ganciclovir and foscarnet should provide an advantage.
Mark Simon, a managing director at Robertson Stephens & Co., in San Francisco, expects approval of Vistide by mid-year and $10 million to $15 million in sales this year, increasing to up to $50 million in 1997.
Lauher said the U.S. market for CMV retinitis was $150 million in 1994. Gilead hasn't set a price on Vistide. She said the company may take on a marketing partner in Europe, where a marketing authorization application is pending. The drug already is being used in France on a compassionate-use basis.
Matthew Geller, an analyst at Oppenheimer & Co., in New York, said Gilead's stock didn't react as positively as may have been expected from a unanimous recommendation for approval. But he pointed out that the stock is up substantially of late, and many investors now are buying in advance of meetings, only to sell when the news comes. Geller said another factor is that concerns raised at the meeting show this class of drug won't capture all the CMV retinitis market.
Gilead will get $25 million to $50 million of what is a potential $300 million market, Geller projected.
Gilead's pipeline consists mainly of nucleotide compounds. The technology was licensed from the Institute of Organic Chemistry and Biochemistry in the Czech Republic.
Behind Vistide is topical cidofovir, which has completed Phase I/II trials for acyclovir-resistant herpes. Topical cidofovir also is in a Phase I/II trial for herpes in patients whose immune systems are not compromised.
Gilead's GS 840 showed statistically significant activity against HIV surrogate markers in a Phase I/II study. Gilead is designing Phase III studies. That compound also is in early trials for hepatitis B. And GS 930, a cidofovir prodrug that's active against several herpesviruses, is in Phase I testing. n
-- Jim Shrine Staff Writer
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