Gilead would rather forget filgotinib

The much-heralded Gilead and Galapagos partnership takes a big knock as the US biotech cuts some of its losses with the doomed arthritis project.

Deals

Jyseleca already looked like an also-ran in the fiercely competitively autoimmune space, even before the FDA rebuffed the drug’s US marketing application for rheumatoid arthritis back in August. Now even bigger questions about the product’s future must be asked, given Gilead’s decision to abandon plans to seek approval in RA and related diseases in the US.

This was prompted by an apparent hardening of the FDA’s stance against Jyseleca and ongoing concerns about testicular toxicity, although Galapagos executives insisted today that no new safety signals had been seen. The Belgian company says it remains committed to the product, which is already approved in RA in Europe, but its commercial potential must be considered seriously diminished, if not already fallen to zero.

It emerged today that in further meetings with the FDA the regulator said it was highly unlikely to approve the higher 200mg dose of Jyseleca, which contains the active ingredient filgotinib, in RA without substantial new clinical studies. The agency also wants to see long-term safety data from Manta and Manta Ray, two studies designed to examine testicular toxicity, stretching out to 52 weeks after the 26-week primary endpoint.

These decisions came as a surprise, Galapagos executives said today on a call, as they professed to be at a loss to explain the change in the FDA’s stance, particularly on the requirement for long-term safety data. The Manta studies are on track to read out in the first half of next year, and data will determine whether Jyseleca has any future at all in the US.

This future will be in inflammatory bowel conditions where, for now, Gilead is pushing on. Rights have been handed back in RA, psoriatic arthritis, ankylosing spondylitis and non-infectious uveitis.

Galapagos is assuming that the FDA will want to see the full 52-week data before making any further judgements on Jyseleca, which means a long wait to find out whether Gilead has any further interest in the drug. True, the US company has decided to retain worldwide rights outside Europe – Jyseleca is also approved in Japan in RA – but, should the toxicity concerns be confirmed, a complete exit from this product is surely inevitable.

Sunk costs? Estimated clinical spend on Jyseleca

Indication
Estimated registered trial cost ($m) Estimated future trial cost ($m) Estimated total cost of clinical programme ($m)
Rheumatoid arthritis 481 - 481
Crohn's disease 257 - 257
Ulcerative colitis 166 - 166
Ankylosing spondylitis 140 - 140
Arthritis, psoriatic 174 - 174
Uveitis 35 94 128
Other immune indications 0 369 369
Total 1,254 462 1,716
Note: Future trial costs estimates the cost of running remaining trials necessary to get a product to market. Source: Evaluate Omnium.

The fallout from all this is that the terms of the companies’ deal over Jyseleca has been renegotiated, with Galapagos now having full European rights, and responsible for most ongoing clinical trials. Galapagos execs described this as a “silver lining” with all the economics in the region now flowing into the company’s coffers, but with a substantial R&D bill still to pay and future sales uncertain this is an optimistic take.

Evaluate Omium estimates that the clinical trials already running might cost $1.3bn. Much of that is probably already spent, but Galapagos’s R&D costs in the coming months will not be insignificant, notwithstanding a €160m payment from Gilead to unwind itself from obligations.

Galapagos shareholders are understandably unimpressed, with shares in the company dropping 17% today to €81, valuing the company at little more than the cash it has in the bank. These levels were last seen in 2018, well before the July 2019 R&D collaboration with Gilead that caused shares in the Belgian biotech to surge, touching €250 at one point in February this year.

At that point the partners were already collaborating on Jyseleca, and the 2019 deal, which covered the rest of Galapagos's pipeline, remains unchanged, execs insisted today. But with Jyseleca looking like it will cost far more than it will ever bring in, that collaboration needs to start paying dividends, as quickly as possible.

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