Gilead Sciences, Inc. (GILD - Free Report) announced that it entered into a licensing and collaboration agreement with South Korea-based Yuhan Corporation.
Both the companies have entered into a licensing and collaboration agreement to co-develop novel therapeutic candidates for the treatment of patients suffering from advanced fibrosis due to non-alcoholic steatohepatitis (NASH).
Per the agreement, Gilead will acquire global rights to develop and commercialize novel small molecules against two undisclosed targets in all countries, except for Republic of Korea where Yuhan will retain certain commercialization rights. While both the companies will jointly conduct preclinical research, Gilead will be responsible for global clinical development. This agreement builds on the companies’ existing commercial collaboration to support the promotion of Gilead’s drugs in Korea.
Gilead will pay Yuhan an upfront fee of $15 million. Yuhan is also entitled to receive milestone payments of $770 million.
Gilead was once a market outperformer, with its strong HCV franchise boasting a number of blockbuster drugs. However, the HCV franchise has been under pressure since the last three-four years due to competitive pressure from the likes of AbbbVie, Inc. (ABBV - Free Report) .
Consequently, Gilead had shifted focus to its HIV franchise and newer avenues like CAR-T therapy and NASH.
Gilead already has a late-stage candidate, selonsertib, and a mid-stage candidate, investigational, selective, non-steroidal farnesoid X receptor (FXR) agonist, GS-9674.
The market for NASH promises potential. A chronic liver disease, NASH is caused by excessive fat accumulation in the liver, which, in turn, is known as steatosis. NASH is known to affect up to 15 million people in the United States and could lead to inflammation, hepatocellular injury, progressive fibrosis and cirrhosis. It is expected to become the leading cause for liver transplantation by 2020.
Patients living with NASH have limited treatment options. Hence, the successful development of its candidates will significantly boost Gilead.
Gilead’s stock has lost 9.5% in the past six months compared with the industry's decline of 17.6%.
Given the prospects of the NASH market, quite a few companies are developing candidates for the same. Intercept Pharmaceuticals, Inc. (ICPT - Free Report) is presently evaluating lead drug Ocaliva in non-cirrhotic NASH patients with liver fibrosis. Merck (MRK - Free Report) recently exercised its option to license NGM313, an investigational monoclonal antibody agonist of the β-Klotho/FGFR1c receptor complex that is currently being evaluated for the treatment of NASH and type 2 diabetes.
Gilead currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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