Gilead Sciences snapped up a Seattle company called Calistoga Pharmaceuticals a few years back as part of a plan to treat cancer, not just HIV, as it’s long been known for.
Today, the Foster City, CA-based company will get that chance, because it just got clearance to begin selling the cancer drug that attracted it to Calistoga in the first place.
The FDA announced today that it’s approved Gilead’s (NASDAQ: GILD) idelalisib, the crown jewel of its Calistoga buyout, for three different types of blood cancers. The drug can be prescribed to patients whose chronic lymphocytic leukemia has returned (relapsed), in tandem with rituximab (Rituxan); and to patients with two other types of non-Hodgkin’s lymphoma—relapsed follicular B-cell non-Hodgkin’s lymphoma, and small lymphocytic lymphoma—after they’ve received at least two prior therapies.
Gilead will sell the drug under the brand name Zydelig.
The approval of idelalisib marks Gilead’s first foray into becoming a cancer drugmaker. Gilead’s $11 billion buyout of Pharmasset a few years ago enabled the company to become the first mover in a new wave of hepatitis C treatments, and the owner of a drug, sofosbuvir (Sovaldi), that’s fast become a mega-blockbuster (and incidentally, the focus of a drug pricing battle with Congress). But it’s also steadily made a series of business development moves in oncology, and one of those moves was its 2011 buyout of Seattle’s Calistoga. Gilead paid $375 million up front, and as much as $600 million overall, so it could obtain the right to what’ll now be sold as Zydelig, a drug designed to inhibit the delta isoform of the P13 kinase pathway—which plays a role in the growth of tumors.
Gilead’s drug was approved based on a 220-patient pivotal study that was stopped early because it clearly showed a benefit. At that point, patients in that study treated with idelalisib and rituximab lived an average of 10.7 months without seeing their tumors spread, compared to about 5.5 months for those on rituximab and a placebo. A second interim analysis showed that the results continued to hold up.
Now Gilead will see how those data translate into sales. It’s entering an increasingly competitive field: idelalisib is heading for a battle with Pharmacyclics (NASDAQ: PCYC) and Johnson & Johnson’s big-selling ibrutinib (Imbruvica). Other companies like AbbVie (NYSE: ABBV) have potential competitors looming. And RBC Capital Markets analyst Michael Yee wrote in a note today that that there are “already very low expectations” for Gilead’s drug—he estimated that the drug would grab 10 to 20 percent share of the market long-term.
One of the disclosures the FDA made today didn’t help: idelalisib was approved with a black box warning instructing clinicians to watch for certain serious side effects like liver toxicities, severe diarrhea, colitis, and inflammation in the lungs. Yee noted, for instance, that those concerns “might mute some of the initial launch of [Gilead’s] drug.”
Still, with various estimates putting peak sales of idelalisib at over $1 billion, Calistoga is looking like a solid investment for Gilead.
“Gilead is committed to the development of novel cancer therapies and we are proud to have this opportunity to make a difference in the lives of people living with these cancers,” said chairman and CEO John C. Martin, in a statement.