Gilead defends investment in cell therapy manufacturing

By Nick Taylor

- Last updated on GMT

(Image: Getty/Feodora Chiosea)
(Image: Getty/Feodora Chiosea)

Related tags: Gilead, Yescarta, CAR-T

Gilead’s continued investment in cell therapy manufacturing capabilities, at a time when sales at the nascent business unit are flatlining, was called into question by investors.

In July 2019, Gilead reaffirmed its commitment to cell therapies by detailing plans to construct a 67,000-square-foot viral vector development and manufacturing facility in Oceanside, California​. The facility will add to its existing manufacturing capabilities gained through its $11.9bn (€10.7bn) takeover of Kite Pharma​.

At the time of the 2017 acquisition, Gilead framed the Kite takeover as part of a long-term strategy to become a leader in cell therapies. The payoff from the deal is yet to materialize.

Sales of the chimeric antigen receptor (CAR)-T therapy Yescarta (axicabtagene ciloleucel), Kite’s one approved drug, totalled $118m in the third quarter, down $2m sequentially.

The contrast between Yescarta’s slow commercial start and Gilead’s desire to expand its production capacity caught the attention of Credit Suisse analyst Evan Seigerman, who asked CEO Daniel O’Day to explain the rationale for investing in the California facility.

O’Day said, “It's really important that we acknowledge the fact that the ability to manufacture and the turnaround time associated with cell therapy is absolutely fundamental to patient benefits and also to the efficacy results that we see​.

I think it's a real competitive advantage to be able to have a network of manufacturing facilities that are state-of-the-art and are able to reduce that turnaround time​.”

Gilead is banking that its investments will pay off in the longer run, but for now its expansion into cell therapies has added more to costs than revenues.

O’Day identified upcoming milestones that could start to tip the balance between costs and sales. At the 2019 ASH Annual Meeting in December, Gilead will share three-year follow-up data on Yescarta in large B-cell lymphoma and results from a registrational study of KTE-X19 in mantle cell lymphoma.

Gilead thinks the readouts could contribute to an uptick in Kite’s commercial performance, however, the unit also faces headwinds. Roche’s antibody-drug conjugate, Polivy (polatuzumab vedotin), is now competing with Yescarta for the large B-cell lymphoma market and Gilead is also fighting with clinical trials for patients.

Robin Washington, CFO at Gilead, said, “We observed CAR-T eligible patients being enrolled in clinical trials at a much higher rate relative to commercial patients. As such, we anticipate further quarterly sales variations but remain very confident in the future trajectory of Yescarta​.”

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