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Investors hope for a repeat of Gilead’s Sovaldi success
With analyst commentaries splitting evenly between those who believed Gilead offered to buy Kite Pharma too soon, and those who thought it had waited too long, Gilead’s CEO, John Milligan, probably chose just the right time. the company has offered $11.9 billion to acquire Kite, thereby gaining access to both the booming cellular therapy field, and to the oncology market. Kite’s lead product, branded as Axi-Cel, is widely expected to get favorable FDA review by November, enabling it to enter the market more or less evenly with Novartis, which won a favorable FDA committee review for its cellular therapy product, tisagenlecleucel, in July.
Both Kite and Novartis are engaged with the new type of drug development known by its acronym, CART-T therapy, which involves removing T cells from patient’s own blood, reworking the genetics of the T cells in a central facility, and then returning them to the patient for infusion. Both are targeting blood cancers (leukemia for Novartis and lymphoma for Kite), although the CAR-T therapy is expected to be widely applicable to a variety of cancers.
For Gilead, the action is highly reminiscent of its purchase of PharmAsset in the early 2010s, after which it introduced Sovaldi (sofosbuvir) as essentially a cure for hepatitis C, a disease that affects millions. Sovaldi not only broke records for speed to blockbuster status (generating $12 billion in its first 12 months on the market); it generated repercussions throughout healthcare as payers grappled with the $84,000 cost of its 12-week regimen. From that (as well as a successor hep C product, Harvoni), Gilead is said to have amassed a $36-billion war chest of cash and securities. And as the value of the hep C franchise has declined with competing products and heavy price discounting, Gilead garnered investor attention that it had to do a next big thing: buying Kite is it.
Dr. Maria Fardis, PhD, CEO of Iovance Biotherapeutics (San Carlos, CA), another cellular therapy developer (and who had worked at Gilead in the past), says the acquisition “brings cellular therapy into the mainstream of oncology,” which will be of benefit to multiple companies, including hers. “Gilead is a innovative company that knows how to execute; this deal gives it access to frontier oncology research.”
Fardis notes that cellular therapy presents a radical change in how drugs are developed; by starting with patients’ own cells, a complex logistics and tracking process has to be established through the entire extraction, manipulation and reinjection process. (In Iovance’s case, this involves extracting T cells from patients’ solid tumors, growing a large quantity of the cells in vitro and away from the tumor itself—with no significant genetic manipulation, and then reinjecting them.) The first such cellular therapy to hit the market, Provenge (sipuleucel-T) from Dendreon, has mostly been considered a failed product launch, but Fardis says that “the industry has learned a lot since them” about handling the logistics and patient treatment of cellular therapy, and this will benefit the industry going forward.