Gilead’s deal big for cancer treatment
Gilead Sciences’ $12 billion investment in cell therapy — announced Monday in its acquisition of Kite Pharma — is a promising step toward advancing the development and commercial viability of a gamechanging cancer treatment, biotech analysts and medical experts said.
The proposed acquisition would be the Foster City biopharmaceutical company’s largest to date, eclipsing its 2011 acquisition of Pharmasset, which brought two leading hepatitis C drugs into Gilead’s portfolio.
The deal with Santa Monica’s Kite is expected to close later this year and will intensify competition among major drug companies to introduce a cutting-edge cancer treatment known as CAR T cell therapy. The therapy extracts a patient’s own cells from his or her blood, genetically modifies them, and then reintroduces them into the person’s body to attack harmful cancer cells. Kite’s treatment, which targets a type of non-Hodgkin’s lymphoma called diffuse large B-cell lymphoma, is expected to receive Food and Drug Administration approval in November. The Swiss pharmaceutical giant Novartis is developing a treatment using similar technology for acute lymphoblastic leukemia that is expected to be approved by regulators around the same time.
It is a bold move by Gilead, whose success thus far has been in making drugs that treat HIV and hepatitis C by blocking the activity of a specific molecule to control the disease. Cell therapy is a new type of medicine that, for the first time, uses modified living cells as the basis of treatment, experts said.
“It’s good for the field of cell therapy in cancer,” said analyst David Nierengarten, head of health care equity research at Wedbush Securities. “And it’s good because we now have two large, well-capitalized companies in Gilead and Novartis working to commercialize and improve upon the current generation of CAR T and cell therapies.”
Analysts predict one dose of Kite’s lymphoma cell therapy treatment will cost between $325,000 and $450,000 — which is sure to prompt questions, if approved, about whether insurers will cover the cost of treatment. The Kite therapy that is awaiting FDA approval is for a single dose. Patients are eligible for the therapy only after they have failed to respond to more common treatments.
A Gilead spokesman declined to comment on potential pricing, citing the pending nature of the acquisition.
Unlike traditional treatments such as oral medication that can block one molecule, cell therapy is more precise and adaptable because it uses engineered living cells, said Wendell Lim, chair of the department of cellular and molecular pharmacology at UCSF. Lim is the co-founder of an Emeryville cell therapy startup, Cell Design Labs, which has received an investment from Kite. Two Kite executives serve on the board of Cell Design Labs.
Lim likened cell therapy to “putting a little nano-robot inside you — or 10 million of them.”
“It’s a real game changer,” Lim said. “This isn’t just another drug. These are smart therapeutics that are capable of sensing and responding in much more nuanced and precise behaviors.”
The immediate targets of cell therapy for oncology are blood cancers. The therapy has yet to be proven as effective for solid tumors; succeeding with those would be “the holy grail” — and was likely what Gilead was eyeing when deciding to make such an aggressive acquisition, analysts said.
New cases of leukemia, lymphoma and myeloma — the most commonly diagnosed blood cancers — are expected to account for just 10 percent of the estimated 1.7 million new cancer cases diagnosed in the United States in 2017, according to the American Cancer Society. Establishing that the treatment works on solid cancers would significantly expand the number of people who could benefit from the therapy.
“Gilead paid quite a bit of money, and the only way to justify that valuation is looking to move into indications that are farther along, or are going to take a lot more development effort to get there,” Nierengarten said. “That’s what they’re investing in.”
The investment is not without risk, and competition is fierce, analysts said. Several other biopharma firms — including Juno Therapeutics, Fate Therapeutics, Bluebird Bio and Cellectis — are in various stages of development for cell therapies.
“Given that CAR T technology is in its infancy and the competitive landscape is in flux and growing, there is substantial uncertainty around which and how many companies will ultimately leverage the technology for commercial success in the long term,” wrote Needham biotech analyst Alan Carr.