Regulatory signals from Gilead Sciences have sparked concern that the company could be heading into its remdesivir data disclosure with a profit-seeking plan in mind- although the move may be more of a defence against the uncertainty of its COVID-19 R&D spending.
Gilead secured an Orphan Drug designation (ODD) from the FDA for COVID-19 antiviral candidate remdesivir- granting it seven years of exclusivity in the US as a COVID-19 treatment, should it be approved, as well as a tax credit for its R&D costs.
Why it matters
The new regulatory designation came through in a nick of time; while the number of COVID-19 cases in the US is currently less than the 200,000-patient threshold that qualifies as an orphan disease, that's unlikely to be the case for long. There were approximately 40,000 diagnosed patients in the US at the time the designation was granted, with numbers rapidly growing.
Gilead's decision to seek the designation therefore raised some eyebrows, as there's only a vanishing chance that COVID-19 will remain an orphan disease. The status has been the subject of abusive previously, with products like Emflaza (deflazacort) attracting criticism after their newly-found exclusivity was associated with price hikes for what had previously been inexpensive products.
Gilead's remdesivir would be a different animal on the exclusivity front, as unlike Emflaza, it is not reliant on ODD-derived exclusivity to keep competing entrants off the market. The company has US and China patents protecting remdesivir; analysts at Morgan Stanley note that they expect the most foundational US patent in the IP portfolio to be issued soon, following its filing more than a year ago- suggesting that the company will not have any immediate concerns over lifecycle management for the product.
However, observers began to suspect that an ODD might imply Gilead is seeking orphan drug pricing for its non-orphan antiviral. A pricing controversy would hardly be new to the company, which saw its hepatitis C product portfolio strain health care systems while effectively curing the disease. It's also freely engaged in hot-button patent litigation to protect the lifecycle of its HIV products, challenging the validity of patents publicly held by the US government.
Conversely, AbbVie has taken a more PR-friendly approach to the pandemic, reportedly dropping its IP enforcement for the antiviral Kaletra (lopinavir/ritonavir)- and perhaps setting a standard that Gilead may be later pressured to comply with. But while AbbVie might expect to see some uptick in off-label use for the HIV drug, Kaletra also underperformed in a recent analysis of COVID-19 patients, reducing the odds that it will become an integral part of the COVID-19 treatment paradigm. (See ViewPoints: Initial glimmers of hope for COVID-19 therapeutics)
The bigger picture
For now, expectations remain low on the potential for remdesivir to be a money-maker in a pandemic- if only constrained by the threat of a compulsory license should the price set by the company not be deemed 'fair.' Gilead has consistently downplayed the commercial opportunity in the space, while also staying mum on extent of its remdesivir-related spending.
Bernstein's Ronny Gal nonetheless went to work on revenue estimates for the product, assuming that the pricing power of other antivirals still applies during a global health emergency. He notes that comparable anti-infective treatment courses are priced at around $5,000 per patient in critical care, using some back-of-the-envelope math to estimate an $11.5-billion opportunity for remdesivir - assuming 15% of the US population is infected and 5% require critical care.
But pricing discussions are still moot in the absence of clinical efficacy and an FDA approval; the company expects results from its first controlled trials of remdesivir in April. (See ViewPoints: Remdesivir the redeemer)
Of course, the caveat to that hefty revenue estimate is that even a best-case scenario is constrained to a one-off event, and could be substantially smaller than predicted in the welcome event that infections fizzle out upon success of social distancing measures- independent of the spending that's already gone into the programme.
That makes a secondary feature of the ODD a potentially key aspect for Gilead; the designation would mean that much of its R&D costs for the programme could become a tax write-off- an important distinction given its at-risk product development, which has scaled up to five clinical trials and an undisclosed manufacturing capacity, rapidly set in motion in the absence of assurances that the pandemic would outlast remdesivir's clinical development timeline.
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