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Photograph of Jaron Nix
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Gilead Sciences
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Galapagos N.V
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Friday, thanks to optimistic trial data regarding the treatment with filgotinib for the treatment of rheumatoid arthritis.
The story back. Large biotech companies have been looking for growth for some time. The partnerships between the huge Gilead (GILD) and the Galapagos (GLPG) – whose market capitalization is just over $ 5 billion – are not uncommon in the industry. (And while these partnerships often result in takeovers, Galapagos has kept its distance for a while.) Gilead's stock has increased 4.5% since the beginning of the year, while Galapagos has increased by 22.5% since the beginning of 2019.
What's up. On Thursday, Gilead and Galapagos released much-needed data on phase 3 trials of filgotinib in two studies. The drug met its primary endpoints and had a safety profile consistent with previous research.
Look to the front. It is not surprising, then, that analysts are largely optimistic about the results, with many comments indicating how successful filgotinib seems to have been in terms of security.
Christopher Marai of Nomura Instinet notes that the drug has "the best safety in its class", while Vamil Divan from Credit Suisse writes that the data "suggest an overall clinical profile with stronger efficacy and safety than demonstrated by other leading oral JAK inhibitors in rheumatoid arthritis".
Somewhere else, OppenheimerS Hartaj Singh wrote that filgotinib could be "a potential multibillion-dollar blockbuster for Gilead," since it is the only treatment that can include a two-dose regimen. SVB LeerinkS Geoffrey Porges He also believes that this is an essential asset as he estimates that filgotinib earns Gilead earnings per share of $ 5-6, or 10 percent of the company's value.
Of course, there are still questions regarding the timing of approval and how regulators will determine the safety and dosage of the drug. However, overall, it's not hard to understand why stocks are up. Filgotinib is still the star candidate of the Galapagos, which largely explains the larger gains of his actions this morning. Still, the news is also a real victory for Gilead: the company has been facing growth problems as it seeks to replicate the success of big franchises such as HIV and Hepatitis C, and the timing is right. Last month, Gilead's shares plummeted after negative data from its treatment for non-alcoholic steatohepatitis (NASH), an area in which rivals are going from the front. Thus, if it is possible that rheumatoid arthritis progresses more quickly, it could greatly alleviate fears that Gilead lacks growth factors.
Gilead is up 2.6% to $ 65.35 recently, while the Galapagos are up 16.9% to $ 112.38.
Write to Teresa Rivas at [email protected]
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