Zacks_Analysts' Blog : Label Change for GILD Drug? - Analyst Blog

Gilead Sciences Inc. (GILD) announced recently that the U.S. Food and Drug Administration (FDA) has approved the removal of potential liver injury warning from the boxed caveat of the Letairis label.

Letairis is approved for the treatment of pulmonary arterial hypertension (PAH). In conjunction with the label change, patients receiving Letairis will no longer require monthly monitoring of liver function through blood tests.

Post marketing data were collected from the Letairis Education and Access Program (LEAP), which reflected the use of Letairis in above 7,800 patients. The FDA approved the label change on the basis of this data, which was found consistent with the clinical trial data used in the registration process of Letairis.

The data did not reveal abnormalities regarding liver function in any of the patients treated with Letairis for 12 weeks. Liver functioning abnormalities were observed in 2.3% patients treated with placebo.

We believe the label change would be a definite positive for the uptake of the drug and lend it a competitive edge over other PAH drugs. Letairis competes with Actelion Pharmaceuticals’ (ALIOF) Tracleer (bosentan), United Therapeutics’ (UTHR) Tyvaso, Remodulin and Adcirca and Pfizer’s (PFE) Revatio.

Letairis is distributed only through LEAP. Only prescribers and pharmacies registered with LEAP are able to prescribe and distribute the drug.

Our Recommendation

Currently, we have a Neutral long-term recommendation on Gilead, which is supported by a Zacks #3 Rank (short term hold). We remain optimistic on the growth potential of Gilead’s HIV franchise drugs Truvada and Atripla.

However, the company’s HIV drugs are facing patent challenges from companies seeking to launch generic versions of the drugs. Also, the issues raised by the FDA regarding contamination at Gilead’s San Dimas production facility could add further pressure on the company’s top-line. Further, Gilead’s revenues continue to be unfavorably impacted by pricing pressures in Europe and currency fluctuation.