Gilead Is Gearing Release Of NASH Results Soon, But Other Deals Are Still Rolling In

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About: Gilead Sciences, Inc. (GILD), Includes: CNAT, GNFTF, ICPT
by: Terry Chrisomalis
Summary

Gilead Sciences continues to make a strong push for partnering with or acquiring NASH companies to solidify a stronghold in this space.

Results from two selonerstib studies treating patients with NASH, both F3 and F4 fibrosis respectively, are expected to be released in the 1st half of 2019.

The phase 2 ATLAS study results using the combination of selonsertib, GS-0976, and GS-9674 to treat patients with NASH and compensated cirrhosis are expected by Q4 of 2019.

There are many other pharmaceutical companies that are expected to report results from their own NASH studies as well in the 1st half of 2019.

The NASH market is expected to be a $20 billion to $35 billion opportunity in the coming years.

Gilead Sciences (GILD) is getting ready to release NASH results in the 1st half of 2019. This will be from studies dealing with selonsertib to treat patients with NASH fibrosis. The thing is that Gilead doesn't want to hinge its entire future on selonsertib. It also wants to establish a stronghold in NASH. Therefore, it has been creating a flurry of deals with many other NASH biotechs. This week is no different, because it has chosen to advance another early stage program that deals with NASH. This is a partnership that was created with a South Korean biotech by the name of Yuhan.

Partnership Deal

This latest deal with Yuhan comes a few weeks after Gilead entered a deal with another NASH biotech. Back in December of 2018, Gilead established a partnership with Scholar Rock Holding Corporation in a $1.5 billion deal. The Yuhan deal is not as big as that one, but it still offers a lot of potential products up for grabs. The NASH market is expected to reach between a $20 billion to $35 billion opportunity in the coming years. According to the agreement, Gilead Sciences is to pay only $15 million in consideration for this deal. If everything goes well, then Yuhan could also be eligible to receive up to $770 million in additional development and commercial milestone payments. This deal is a very fair one. That's because Gilead will acquire the global rights for molecules against two undisclosed targets. Yuhan will retain the rights in the Republic of Korea. However, both Gilead and Yuhan will work on the preclinical research aspect for these candidates. Gilead will also be fully responsible for commercialization in all territories outside of Korea. What Yuhan will still get is royalties on future net sales for any products that are sold globally. One thing to point out is that this collaboration involves targeting advanced fibrosis. What that means is that it will put focus on NASH patients with F3 and F4 fibrosis. Most of the other NASH studies now are targeting patients with F2/F3 fibrosis. In other words, most drugs are targeting close to the early stages of NASH.

Expected Data

Gilead Sciences is expecting results from two of its studies for NASH in the 1st half of 2019. The first study to be reported is known as STELLAR-4. Results from this study are going to be released Q1 2019. This involves using selonsertib to treat compensated cirrhosis patients due to NASH. The recruitment criteria for this study is that patients must have F4 fibrosis. There are two primary efficacy endpoints for this study. The first is the typical NASH primary endpoint used for a majority of the studies. It is a proportion of patients who achieve a ≥ 1-stage improvement in Fibrosis according to the NASH Clinical Research Network (CRN) classification without worsening of NASH. This endpoint is being tested over a time period of 48 weeks. The second primary endpoint is looking at event-free survival at week 240 as assessed by time to first clinical event. The estimated primary completion date for this study is January of 2019. This is an important study, because it will likely be the first look into selonsertib in potentially being able to treat patients with advanced NASH fibrosis. The second trial that is going to report results in the 1st half of 2019 for Gilead is the STELLAR-3 study. The STELLAR-3 study is almost the same at STELLAR-4. It has the same co-primary efficacy endpoints. However, this time around, it treats a slightly different fibrosis population. This STELLAR-3 study focuses on patients with F3 fibrosis in NASH. This is another shot on goal for Gilead to prove that selonsertib may be successful in treating the NASH population. The estimated primary completion date is around March of 2019 for this study, which means results could be out by April/May of 2019. Both studies are expected in the 1st half of 2019, and they will indicate whether or not Gilead made the right move acquiring this clinical product for NASH.

Competitors

One of the most significant competitors in the near term for Gilead Sciences would be Intercept Pharmaceuticals (ICPT). That's because results from Intercept's phase 3 REGENERATE study are due this quarter. Specifically, Intercept announced an update that interim results from this phase 3 study are expected in Q1 of 2019. Intercept is targeting NASH fibrosis patients in this study with F2/F3 fibrosis. There are going to be two co-primary endpoints as well. The first primary endpoint is the amount of patients that achieve at least one stage of liver fibrosis improvement with no worsening of NASH. The second primary endpoint is the amount of patients who achieve NASH resolution with no worsening of liver fibrosis. Intercept has a good chance to succeed with its drug Ocaliva in this study. That's because its phase 2 FLINT study a few years back was stopped early due to meeting the primary endpoint at an interim analysis. Genfit (OTCPK:GNFTF) also has a phase 3 study in NASH to report as well in 2019. It expects to report results from its phase 3 RESOLVE-IT study using elafibranor to treat NASH patients by the end of 2019. Genfit had a recent positive 30-month DSMB recommendation for its RESOLVE-IT study. It was concluded after the safety review that this study should continue as planned without modifications. The only downside is that this study won't have its top-line read out until the end of 2019. Another pharmaceutical company working on treating patients with NASH fibrosis is Conatus Pharmaceuticals (CNAT). Conatus is set to report results for its ENCORE-NF phase 2b study in the 1st half of 2019. Specifically, the estimated primary completion date for this study is December of 2018. That means I expect results from this study to be released January/February of 2019. Conatus, like Intercept, is also targeting the F2/F3 fibrosis patient population for NASH. However, for Conatus, it had to change its protocol with the FDA a few months back. That's because its study was set up to meet the primary endpoint with only the F1/F2/F3 fibrosis population. The FDA will now allow this biotech to hit the primary endpoint with either this F1/F2/F3 population, or the F1/F2 fibrosis population. This flexibility might give Conatus a better shot at meeting the primary endpoint with either of these specific NASH populations. Especially, since this is one the longest studies performed by Conatus. This study will treat NASH patients with two doses of emricasan, 5 mg or 50 mg, for 72 weeks.

Conclusion

Gilead Sciences continues to acquire NASH pharmaceutical companies. This indicates to me that it really wants to succeed in advancing products towards potential approval in the NASH fibrosis space. The risk is that the latest deal to acquire two undisclosed targets, means it is too early to say if these will pay off in the long run. Gilead and its partner will still need to pick specific targets and advance preclinical studies based on these products. For such products from Gilead and Yuhan to come to market, it could possibly take 6 years or more. The second risk involves the 2 selonsertib study results that are expected to read out in the 1st half of 2019. It is imperative to see if the primary endpoints are achieved. The good news is that Gilead has established itself in a good position with multiple partnerships/acquisitions for NASH. It has already acquired biotechs like Nimbus and Phenex for their NASH products in prior years. I talked about the Scholar Rock Holdings partnership established a few weeks ago totaling $1.5 billion. I believe the general goal for Gilead is to start off with single drugs first. For example, like it is doing with selonsertib testing it out in patients with different stages of fibrosis on its own. Then, on the other hand, it is proceeding with combination therapies. For instance, it has a study ongoing testing three of its NASH drugs together to treat NASH. This combination is being tested in the phase 2 ATLAS study, which includes selonsertib, GS-0976 Acetyl-CoA carboxylase), and GS-9674 (FXR-agonist). The only thing is that results from this study are not expected until Q4 of 2019. There is no guarantee either that this combination can produce better data than the individual NASH drugs that have already proven themselves in larger studies. Still, I believe that Gilead has taken an acquisition/partnering approach to potentially keeping itself at the top of the NASH race. Will that be enough with so many competitors in place? It's too early to tell right now. The first item is to see if at least selonsertib in the coming weeks and months produces the data it needs to solidify Gilead in the NASH space.

Disclosure: I am/we are long CNAT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.