Gilead Sciences has inked a joint procurement agreement (JPA) with the European Commission (EC) for the supply of up to 500,000 treatment courses of veklury, the brand name for remdesivir, its antiviral drug for the treatment of Covid-19.
According to a statement by the EC, the argeement with Gilead (GILD) has been signed by 36 participants including all EU countries, European Economic Area (EEA) countries, the UK, as well as 6 candidate countries and other potential candidates, which are Albania, the Republic of North Macedonia, Montenegro, Serbia, Kosovo and Bosnia and Herzegovina.
All participating countries can now place their orders to procure remdesivir directly. Remdesivir is the only medicine with a conditional marketing authorisation in the EU for the treatment of Covid-19 patients with pneumonia in need of oxygen supply. The agreement is for remdesivir purchases over the next six months and includes an option for extension.
The JPA replaces an Emergency Support Instrument (ESI) that enabled the EC to procure 33,380 treatment courses of remdesivir for EU member states, including the UK, from August through October 2020. Both the ESI and JPA temporarily remove the need for country-by-country reimbursement processes that typically follow marketing authorization.
The EC granted conditional marketing authorization of remdesivir on July 3, based on data from the randomized, double-blind, placebo-controlled ACTT-1 trial that demonstrated the clinical efficacy and safety of the antiviral drug in Covid-19 patients with pneumonia requiring supplemental oxygen. The increased supply of remdesivir is expected to help patients recover faster, thereby reducing hospital stays.
Gilead said that remdesivir supply is poised to meet global demand by the end of this month. The company said that more than 40 contract manufacturing organizations, including more than 10 partner sites in Europe, support the production of remdesivir supply for patients and clinical trials around the world. As a result, Gilead is on track to produce more than 2 million treatment courses of remdesivir this year and targets to produce several million more treatment courses in 2021, if required.
Shares in Gilead have declined about 3.4% year-to-date with the $80.12 average analyst price target indicating 28% upside potential lies ahead in the coming 12 months.
Last month, Gilead announced the acquisition of Immunomedics in a $21 billion cash and debt deal. The transaction adds an antibody drug conjugate platform as well as the lead asset Trodelvy. Following the deal Needham analyst Alan Carr said that the transaction is “hefty” but does add a new dimension to the Gilead oncology pipeline.
“Mgmt maintains there is an ongoing commitment to all three core disease areas (HIV, autoimmune disease and oncology) and indicated more transactions and collaborations should be expected,” Carr wrote in a note to inestors. “We believe this flurry of activity to build the pipeline behind virology may start to have a material impact 2022+.”
However, the analyst maintained a Hold rating on the stock, citing concerns over revenue growth. Challenges include competitive environments in HIV, HCV, autoimmune disease, oncology, and cell therapy, he added.
The rest of the Street is cautiously optimistic on the stock. The Moderate Buy analyst consensus is based on 9 Buys versus 10 Holds and 2 Sells. (See Gilead stock analysis on TipRanks).
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