Setback for Gilead's Pipeline - Analyst Blog

Gilead Sciences (GILD) received a major pipeline setback with disappointing results from a phase III trial of darusentan in which it failed to achieve its primary endpoint. The drug was being studied under an international clinical trial (DAR-312) for the treatment of resistant hypertension. As a result of the setback, Gilead is considering the option of dropping the program so that its resources can be utilized for other potential candidates rather than conducting another intensive phase III study.

The DAR-312 trial was conducted with 849 patients who were randomized to receive darusentan (in three dosage forms of 50, 100 or 300 mg once daily), an active comparator (guanfacine 1 mg once daily) or placebo. The drug was being studied for its effectiveness to improve systolic and diastolic blood pressure compared to placebo. However, results revealed that the improvement was not statistically significant though the study met other secondary endpoints. The loss of darusentan is a major blow to Gilead's diversification strategy away from its HIV franchise.

While we are disappointed with the failure of Gilead’s hypertension drug, we are awaiting the US Food and Drug Administration’s (FDA) decision on the company’s inhalable aztreonam for the treatment of lung infection caused by Pseudomonas aeruginosa (P. aeruginosa) in patients with cystic fibrosis (CF). Recently, the drug received favorable opinion from the FDA’s advisory committee.

Approval of aztreonam will strengthen Gilead’s non HIV portfolio. Earnings over the past few quarters have been above expectations specifically on strong sales of the HIV franchise. Following the release of third quarter results, Gilead increased its revenue guidance for 2009. Net product revenues are now expected to be approximately $6.35 billion, up from the earlier guidance of $6.1 billion – $6.2 billion. We have a Neutral recommendation on the stock.

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