Gilead's (GILD) Late-Stage Study On Liver Disease Drug Fails

Shares of Gilead Sciences, Inc. (NASDAQ:GILD) declined in after-market trading on Feb 11, after the company announced the failure of a late-stage study on pipeline candidate, selonsertib, in patients with compensated cirrhosis (F4) due to nonalcoholic steatohepatitis (NASH).

Gilead’s stock has declined 17.8% in the past six months compared with the industry's decline of 16.5%.

STELLAR-4, a phase III, randomized, double-blind, placebo-controlled study (n=877) evaluated the safety and efficacy of selonsertib, which is an investigational, once-daily, oral inhibitor of apoptosis signal-regulating kinase 1 (ASK1), in patients with compensated cirrhosis due to NASH.

However, the study did not meet the pre-specified week 48 primary endpoint of a ≥ 1-stage histologic improvement in fibrosis without worsening of NASH.

Gilead is conducting an in-depth analysis of the findings and data will be submitted to an upcoming scientific conference. The company is also working with the Data Monitoring Committee and investigators to conclude the STELLAR-4 study in a manner consistent with the best interests of each patient.

Meanwhile, results from the phase III STELLAR-3 trial of selonsertib in patients with bridging fibrosis (F3) due to NASH and the phase II ATLAS combination trial of selonsertib, cilofexor (GS-9674) and firsocostat (GS-0976) in patients with advanced fibrosis are expected later this year.

The failure of the STELLAR-4 study comes as a disappointment, given the significant market potential of NASH. We note that Gilead had shifted focus to its HIV franchise and newer avenues like CAR-T therapy and NASH, given the persistent decline in its once market-leading HCV franchise.

The market for NASH promises potential and is expected to be one of the target areas in 2019 by most large pharma/biotech companies. This market is poised to witness rapid growth unlike other lucrative yet saturated markets like cancer. A chronic liver disease, NASH is caused by excessive fat accumulation in the liver, known as steatosis. Per records, it has affected up to 15 million people in the United Stated and could cause inflammation, hepatocellular injury, progressive fibrosis and cirrhosis.

With no treatments currently approved to address this disease, the market opportunity is substantially huge. In fact, many companies are investing a major chunk of their R&D spend in the same.

Intercept Pharmaceuticals (NASDAQ:ICPT) is evaluating its lead candidate, obeticholic acid (OCA) for treating NASH patients. Currently, a phase III study, REGENERATE, among non-cirrhotic NASH patients with liver fibrosis, is ongoing.

Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) and Viking Therapeutics, Inc. (NASDAQ:VKTX) too have promising NASH candidates in their pipeline.

Zacks Rank

Gilead currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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