Gilead stock falls after lung cancer study results disappoint

Key Points

Stock Impact and Drug Trial Outcome:

• • Gilead’s stock experienced a more than 10% decline on Monday following disappointing results from a late-stage trial of its key cancer drug, Trodelvy.
  • The drug, intended to extend the lives of patients with a specific type of lung cancer, did not meet the trial’s success criteria, posing a significant blow to Gilead.
  • Trodelvy is a crucial part of Gilead’s oncology sales, contributing approximately one-third of the company’s $769 million in oncology sales during the third quarter.

Phase-Three Study and Future Discussions:

• • The phase-three study was aimed at expanding the use of Trodelvy, which is already approved for treating certain types of breast and bladder cancers.
  • While Gilead claims that patients with advanced non-small cell lung cancer who took Trodelvy lived longer than those receiving chemotherapy alone, the results fell short of the trial’s success bar.
  • Gilead plans to discuss the trial results with regulators and explore whether specific lung cancer patients may still benefit from the drug.

Trodelvy, ADCs, and Industry Trends:

• • Trodelvy belongs to the class of antibody-drug conjugates (ADCs), which are highly sought-after treatments delivering targeted cancer-killing therapy to minimize damage to healthy cells.
  • ADCs represent a hot area in the pharmaceutical industry, with large drugmakers engaging in deals to acquire or co-develop these innovative treatments.
  • Jefferies analyst Michael Yee expressed that Gilead’s trial results were not entirely surprising to the firm, citing mixed data from early studies and lackluster data for competing drugs. Yee added that these results could dent investor confidence in Gilead’s potential for significant sales in oncology.