Gilead (GILD) Shareholders wouldn’t expect to watch short investors make billions of dollars going against Gilead during this firm’s most glorious times. We never imagined negative analysts could have the capability of persuading millions of shareholders to sell and cause a selloff of the most productive, most growing, most achieving and extremely well run biotech company.
Gilead reported quarterly earnings and revenue on Tuesday that beat exaggerated analysts’ expectations. Fourth quarter revenue increased to $8.51 billion, up from $7.31 billion and earnings per share was up to $3.32, compared to $2.43 a share a year earlier. (with their intentioned exaggeration, analysts expected Gilead to report earnings of about $3 a share on $8.14 billion in revenue, according to a consensus estimate from Thomson Reuters.)
The firm announced its approval of a $12 billion share buyback and a 10 percent increase in the quarterly dividend. Overall product sales have increased almost across all its products, especially its hepatitis C treatments in Japan where sales of Gilead’s HIV rallied too.
After Gilead has beaten exaggerated analysts’ expectations, many articles, which confuse and mislead rather than instruct, continued to rain poison on investors’ minds; dwelling on the high drug prices, a subject that politicians wanted to take advantage of by bringing Turing Pharmaceuticals as an example of drug firms’ greed.
We reminded that the choice of Turing to represent the drug industry as a whole was distasteful and that the biotech companies are not the sole responsible for the high prices of drugs and are not our enemies to fight, but unique achievers that we owe respect. We stressed the fact that finding a genuine solution for a grave problem such as the exorbitant drugs’ prices must be discussed with all the parties running the healthcare show around the table, not only the drug companies.
If Gilead, whose products’ sales generated billions of dollars over the previous year would have missed analysts’ estimates by one penny, negative-born analysts would have further devastated GILD without mercy. The irony is that the same critics who ask publicly-traded firms to keep growing their revenues, regardless of how much their revenues and incomes have already flourished in record time, are the same critics who, more than anybody else, are expressing concern about the prices of drugs. After Gilead announced immaculate quarterly results, short analysts found it impossible using the quarterly report’s trick to hurt Gilead, they had to create alternative negatives. Here is what they came with:
1. Merck’s newly approved HCV drug Zepatier would erode Harvoni’s sales
This speculation has proven not to hold water. Zepatier’s insert information carries a warning stating that Zepatier could cause ALT elevations and the users should perform liver testing prior to taking the drug, then again at week 8, and as clinically indicated and more tests for various usage of the drug. Gilead’s drug Harvoni is the only drug on the market that doesn’t have such warning, which exists also for AbbVie’s HCV combination.
Moreover, Gilead’s investigational pan-genotypic STR is nearing approval. The drug has the potential to effectively treat chronic HCV patients, regardless of HCV genotype. Gilead’s other Investigational programs are also underway, focusing on other non-viral liver diseases such as nonalcoholic steatohepatitis, primary sclerosing cholangitis and liver fibrosis.
2. Investors are concerned that Gilead could not sustain its growth in the future.
Can anybody ask those people to give one reason for investors to be concerned about Gilead future? If there is one company that we should not be concerned about its future growth this firm would be Gilead. The firm’s pipeline is rich and solid and comprises various promising programs. It also has ton of cash that enables it to buy any successful company on the market. Gilead will definitely make acquisitions, but it is wise enough to know exactly what is the best to buy. Gilead will indeed buy the best.
Investing $12 billion in itself doesn’t agree with the critics’ concerns about Gilead future.
What we are experiencing is a humorless show. Because this circus is run by its clowns.
What Might You Have Ignored During The Market Disorientation?
During earthquakes, storms, hurricanes, wars, or any other devastating events, people’s ears and eyes do not see or hear anything, except from and about the catastrophes. It is the same for investors in Wall Street. During the market’s episodes manifested by extreme volatility, lack of control and absence of explanation, investors forget about the reasons that led them to choose the firms they decided to invest in during intervals of serenity. During the market storm, though, they panic, drop their wisdom and rush to sell the best of their stocks’ choices. They themselves cause the selloffs by adding fuel to the deliberately ignited fire that aims at burning their investments.
During the market irrational behavior, shareholders who rushed to sell AMGN missed listening to Amgen’s positive news. The most recent of what they missed was the approval of the supplemental new drug application (sNDA) of Amgen’s second generation proteasome inhibitor drug Kyprolis. The approval was granted to Kyprolis in combination with dexamethasone or with lenalidomide plus dexamethasone for relapsed or refractory multiple myeloma patients who have received one to three lines of therapy.
The approval is based on results from the Phase 3 head-to-head ENDEAVOR study. The data showed patients with relapsed multiple myeloma who were treated with Kyprolis and dexamethasone achieve 50 percent greater progressive-free survival (PFS) of 18.7 months compared to 9.4 months in those receiving Velcade® (bortezomib) and dexamethasone, the current standard of care for relapsed multiple myeloma.
See the firm’s press release for further information and for the drug’s adverse effects.
What investors missed during the dark stock market’s volatility and negativity is that Kyprolis has become the only therapy for relapsed multiple myeloma with efficacy established using the drug as single agent and in double, or triple combinations. They missed the fact that the new approval supports the use of Kyprolis for relapsed multiple myeloma, which is a difficult-to-treat blood cancer condition.
Although patients with multiple myeloma have benefited from new previous targeted treatments, especially the first generation proteasome inhibitor Velcade® (bortezomib), still the disease has remained incurable as relapses keep occurring and resistance to all existing treatments continued to happen following prolonged treatments. Kyprolis’s new FDA approval brings hope to multiple myeloma patients whose cancer has become resistant to all other treatments.
Multiple myeloma is an incurable blood cancer, which is extremely very aggressive. Approximately, 26,850 Americans are diagnosed with this cancer each year and 11,240 patient deaths are reported on an annual basis.
So, the approval of Kyprolis is great news for the medical community, the victims of the disease and for Amgen.
Regarding Amgen, this news is not the only important news seemed to be missed by investors. Positive news has also been missed (or forgotten during the market storm) about many other approvals that have already been granted to Amgen in 2015 and others that we expect will be granted in 2016 and beyond. The following are only some of the forgotten Amgen approved products in 2015 and the first month of 2016.
1. ABP 501: FDA accepted for review Amgen’s Biologics License Application (BLA) for ABP 501, a biosimilar candidate to Humira® (adalimumab).
We mentioned this biosimilar prior to approval because we expect it to be approved and because Humira®, which is owned by AbbVie is a best seller. It is currently used for many inflammatory diseases, including many rheumatic and diverse autoimmune diseases, generating around $15 billion/year
2. Repatha™ (evolocumab injection granted FDA approval for adults with heterozygous familial hyper-cholesterolemia (HeFH) or clinical atherosclerotic cardiovascular disease (ASCVD), or patients who require additional lowering of LDL-C. The drug is also approved as an adjunct to diet and other LDL-lowering therapies for the treatment of patients with homozygous familial hypercholesterolemia (HoFH), who require additional lowering of LDL-C.
Repatha is a human monoclonal antibody that inhibits proprotein convertase subtilisin/kexin type 9 (PCSK9), a protein that reduces the liver’s ability to remove low-density lipoprotein cholesterol (LDL-C), or “bad” cholesterol, from the blood.
Recently, Rapatha was also approved in Japan.
Repatha was developed in Japan by Amgen Astellas BioPharma K.K. (AABP), a joint venture between Amgen and Astellas Pharma Inc., a pharmaceutical company headquartered in Tokyo.
Rapatha is expected to be best seller. (See Also Regeneron)
3. IMLYGIC™ (talimogene laherparepvec) has been approved by the European Commission for adults with unresectable melanoma that is regionally or distantly metastatic (Stage IIIB, IIIC and IVM1a), with no bone, brain, lung or other visceral disease. The drug is a genetically modified oncolytic viral therapy indicated for the local treatment of unresectable cutaneous, subcutaneous and nodal lesions in patients with melanoma that recurred after initial surgery. IMLYGIC is the first oncolytic viral therapy to be approved by the FDA based on therapeutic benefit demonstrated in a pivotal Phase 3 clinical trial.
The FDA has approved the Biologics License Application for IMLYGIC™.
Amgen (AMGN) and Merck (MRK), known as MSD outside the U.S. and Canada have expanded their collaboration to include the evaluation of efficacy and safety of talimogene laherparepvec in combination with KEYTRUDA® (pembrolizumab), Merck’s anti-PD-1 therapy, in a Phase 1, open-label trial of patients with recurrent or metastatic squamous cell carcinoma of the head and neck (SCCHN).
In addition, the companies announced that a global, randomized Phase 3 trial evaluating the combination in patients with regionally or distantly metastatic melanoma is being initiated. As previously announced, the compounds are being studied in a Phase 1, open-label trial in this patient population.
4. Corlanor® (ivabradine): The FDA has granted approval of Corlanor® (ivabradine). The oral drug is indicated to reduce the risk of hospitalization for worsening heart failure. Eligible patients are those with stable, symptomatic chronic heart failure with left ventricular ejection fraction (LVEF) ≤35 percent, who are in sinus rhythm with resting heart rate ≥70 beats per minute (bpm) and either are on maximally tolerated doses of beta blockers or have a contraindication to beta blocker use.
5. Vectibix® (panitumumab): The European Commission approved a new use of Vectibix® (panitumumab) as first-line treatment in combination with FOLFIRI for adult patients with wild-type (WT) RAS metastatic colorectal cancer (mCRC). About half of the patients with mCRC have WT RAS tumors.1 FOLFIRI, an irinotecan-based chemotherapy regimen, is frequently used in first-line colorectal cancer treatment in Europe.
The following product is progressing with promising results in clinical trials
BLINCYTO® (blinatumomab) is for adults with relapsed or refractory Philadelphia chromosome-positive (Ph+) B-cell precursor acute lymphoblastic leukemia (ALL). Results of a Phase 2 trial to evaluate the efficacy and safety of BLINCYTO® showed blinatumomab monotherapy induced a complete remission, or complete remission with partial hematological recovery within two cycles of treatment on clinically meaningful number of patients. Overall safety results from this study were consistent with the known blinatumomab safety profile.
The data will be submitted to a future medical conference and for publication.
The above is about some drugs that have been granted FDA and European approvals for Amgen in 2015 and January 2016. The markets are huge for most of them. The fact is that these are a few of many products that are still investigational and speeding towards the market.
Amgen is involved in immunotherapy and its product Imlygic™ is the first immunotherapy product that is a virus-derived drug. Indeed, the product is derived from the herpes simplex type 1 virus (HSV-1) known as the cold sore virus. Imlygic has been modified to replicate within tumors and to produce the immune boosting protein human granulocyte-macrophage colony-stimulating factor (GM-CSF). The drug is designed to cause the death of tumor cells and initiate an anti-tumor immune response.
Its immunotherapy program is being enlarged and pushed forward and include the combination of Imlygic with Keytruda (pembrolizumab), a PD-1 inhibitor developed by Merck for advanced melanoma. Other immunotherapy combinations are planned, or in testing.
There is a lot more to tell about Amgen, but we cannot tell it all in this article.