Gilead may struggle to expand remdesivir's market to moderately ill COVID-19

Gilead Sciences had barely rushed its COVID-19 drug remdesivir into mass production when it started touting the potential benefits of alternate formulations of the IV drug, including an inhaler that moderately ill patients could use at home. The company says it’s already working on developing inhaled remdesivir as well as a version that could be injected under the skin.

But for those easy-to-administer renditions of remdesivir to contribute to Gilead’s top line, the company will first have to demonstrate the drug makes a meaningful impact on moderately ill patients—and that won’t be easy, JPMorgan analyst Cory Kasimov warned investors in a note earlier this week.

In fact, Kasimov said, “remdesivir is unlikely to result in tangible long-term cash flows,” and the expected $5 billion short-term boost to sales from the drug will have a “marginal impact” on the company’s valuation going forward, Kasimov added.

The comments came days after Kasimov moderated a conference call with Gilead’s chief financial officer, Andrew Dickinson, and chief commercial officer, Johanna Mercier. Dickinson promised data on remdesivir’s effectiveness in moderately ill patients would be released in two to four weeks.

Dickinson said during the call that with preclinical studies and “emerging clinical data,” “it would be hard for us to see a scenario where … you don’t see the strong, potent antiviral effect in moderate patients that you see in all of the other studies … The question really is, can you show a benefit?”

But that’s an important question for Gilead to be able to answer—and Mercier made no promises during the call that the company could clear that hurdle. That’s because the data will need to reflect a decrease in the number of days moderately ill patients spend in the hospital, she said.

Remdesivir was authorized by the FDA for emergency use in hospitalized COVID-19 patients just days after one placebo-controlled study showed it slashed the recovery time by four days. But that study was limited to patients with severe lung disease who required supplemental oxygen or ventilators.

Mercier said during the JPMorgan conference call that easier-to-use versions of remdesevir, such as an inhaler, could allow for “blending in that moderate patient but potentially at an outpatient setting,” but that “showing the number of days in hospitalization reduction benefit in moderate patients is going to be a little bit tougher.”

That will only compound the challenges Gilead is facing as it tries to figure out how to monetize remdesivir while simultaneously meeting the demand to deploy the medicine toward ending the pandemic. Before the approval, Gilead pledged to donate 1.5 million vials of remdesivir through the early summer.

Gilead has yet to price remdesivir for broader use, but it’s already facing pressure from a range of consumer groups and price watchdogs. Public Citizen is urging the company to charge $1 a day based on an estimate the drug only costs 93 cents per dose to manufacture. But the Institute for Clinical and Economic Review said a price of $4,460 for an entire course of treatment would be fair, provided it can show it saves lives.

All told, said Mercier during the JPMorgan call, there are “so many different pieces that go into this puzzle that we need to think about.” In the midst of a pandemic, she added, “I think that we’re very conscious of our responsibility as a company, in light of not only the public health crisis that we have, but also the economic crisis that is building up right now.”