Gilead Ends Letairis Trial for IPF - Analyst Blog

Gilead Sciences Inc.(GILD) recently announced that it will terminate its phase III trial (ARTEMIS-IPF) studying Letairis (ambrisentan) for the treatment of idiopathic pulmonary fibrosis (IPF) due to lack of efficacy.

The study's Data Monitoring Committee (DMC) had conducted an interim analysis of the efficacy and safety data of the trial. The data was also reviewed by Gilead. It did not show any treatment benefit in the patients receiving Letairis. Gilead is currently conducting a thorough analysis of the data and will present the results of the analysis once they are available.

Letairis, currently marketed for the treatment of pulmonary arterial hypertension (PAH), competes with drugs like Actelion Pharmaceuticals'  Tracleer (bosentan) United Therapeutics' (UTHR) Tyvaso and Adcirca and Pfizer's (PFE) Revatio.

Letairis is not the key revenue generator for Gilead and thus we believe that discontinuation of Letairis for IPF will not have a major impact on the top-line.

Earlier this week Gilead entered into an agreement to acquire Arresto Biosciences, a biotechnology firm engaged in developing therapeutics for fibrotic diseases and cancer.

Once this acquisition is completed, Gilead will have access to Arresto's lead pipeline candidate AB0024, a humanized monoclonal antibody (mAb) targeting the human lysl-oxidase-like-2 protein. AB0024 is being studied in phase I trial for the treatment of idiopathic pulmonary fibrosis (IPF), the same rare and fatal lung disease that Gilead's now cancelled study for Letairis was targeting.

We believe the Arresto acquisition represents a good strategic fit given Gilead's respiratory/early-stage cancer franchise.

Our View

We currently have a Neutral recommendation on Gilead, which is supported by a Zacks #3 Rank (short-term Hold rating). We remain optimistic on the growth potential of Gilead's HIV franchise drugs, Truvada and Atripla, and the company's progress with its pipeline.

However, the company's HIV drugs are facing patent challenges from companies seeking to launch generic versions of the drugs. Also, the issues raised by the FDA regarding contamination at Gilead's San Dimas production facility could add further pressure on the company's top-line. Further, Gilead's revenues continue to be unfavorably impacted by pricing pressures in Europe and currency fluctuation.