Gilead Sciences Inc.'s stock didn't recover fully Monday from thepossibly unfair beating it took Friday as the company was making acase for its AIDS-related cytomegalovirus (CMV) retinitis drug to ajoint FDA advisory panel.
The Foster City, Calif., company ended with a unanimousrecommendation for approval of Vistide, but that came after themarket closed and long after NASDAQ halted trading on the stockbecause of early wire reports suggesting panel members wereconcerned about toxicity issues. Gilead (NASDAQ:GILD) fell $8.25to $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 $3.50at $30 in trading of 4.8 million shares.
Also Monday Gilead said underwriters of its recent public offeringexercised 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 millionin cash and 28 million shares outstanding.
Lana Lauher, Gilead's manager, corporate communications, saidproceeds from the offering will go toward putting a specialized salesforce in place for Vistide and continued development of thecompany's pipeline. Vistide (cidofovir) is Gilead's lead product andthe first nucleotide analogue to be recommended for FDA approval.
"We have a deep and broad antiviral pipeline that rivals any in thebiotechnology or pharmaceutical industries," Lauher said, adding thatGilead 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 strongbuy recommendation with a 12-month price target of $47. He said thestrong efficacy data showing Vistide slowed disease progression wasobscured by peripheral issues early in the meeting.
The committee recommended a label with no warnings, which shouldhelp entry into the marketplace. He said ease of use compared tocompeting products ganciclovir and foscarnet should provide anadvantage.
Mark Simon, a managing director at Robertson Stephens & Co., inSan Francisco, expects approval of Vistide by mid-year and $10million to $15 million in sales this year, increasing to up to $50million in 1997.
Lauher said the U.S. market for CMV retinitis was $150 million in1994. Gilead hasn't set a price on Vistide. She said the company maytake on a marketing partner in Europe, where a marketingauthorization application is pending. The drug already is being usedin 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 beenexpected from a unanimous recommendation for approval. But hepointed out that the stock is up substantially of late, and manyinvestors now are buying in advance of meetings, only to sell whenthe news comes. Geller said another factor is that concerns raised atthe meeting show this class of drug won't capture all the CMVretinitis market.
Gilead will get $25 million to $50 million of what is a potential $300million market, Geller projected.
Gilead's pipeline consists mainly of nucleotide compounds. Thetechnology was licensed from the Institute of Organic Chemistry andBiochemistry in the Czech Republic.
Behind Vistide is topical cidofovir, which has completed Phase I/IItrials for acyclovir-resistant herpes. Topical cidofovir also is in aPhase I/II trial for herpes in patients whose immune systems are notcompromised.
Gilead's GS 840 showed statistically significant activity against HIVsurrogate markers in a Phase I/II study. Gilead is designing Phase IIIstudies. That compound also is in early trials for hepatitis B. And GS930, a cidofovir prodrug that's active against several herpesviruses, isin Phase I testing. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.