Analysis: Sales of first big COVID-19 drug, remdesivir, may disappoint

Investors betting on big profits from COVID-19 treatments may get an unwelcome surprise when Gilead Sciences Inc GILD.O reports quarterly results this month. Its remdesivir, the first important coronavirus treatment, has not been used as much as first expected and faces complex insurance reimbursement issues.

Its best hope may be that the United States and other Northern Hemisphere governments concerned about a winter spike in cases are beginning to stockpile the antiviral drug, which is also being tested in combination with experimental COVID-19 antibody therapies.

Remdesivir has become the standard of care for patients hospitalized with severe COVID-19. But many doctors remain wary of using it more widely, raising questions about lofty analyst sales forecasts for a drug that could eventually be eclipsed by newer treatments.

The World Health Organization on Thursday said its international trial of COVID-19 therapies found that remdesivir did not have a substantial effect on patients’ length of hospital stay or chances of survival. The study has not been reviewed by outside experts.

Gilead, whose shares have fallen 22% since the U.S. Food and Drug Administration authorized remdesivir for emergency use in May, said the WHO findings are “inconsistent with more robust evidence.”

The company struggled to meet early demand and gave away around 250,000 courses earlier in the pandemic, when remdesivir was the only treatment proven to shorten hospital stays for severely ill patients.

Since then, low-cost steroids have demonstrated an ability to cut death risk in severely ill COVID-19 patients, and doctors question the medical value of using remdesivir for moderately-ill patients.

Wall Street forecast $2.5 billion in worldwide sales of remdesivir this year, according to Refinitiv. However, the U.S. Department of Health and Human Services (HHS), which oversaw the drug’s second-quarter distribution, said hospitals only bought 32% of 500,000 available courses – worth about $500 million at $3,120 per course.

The European Union in July purchased 30,000 courses worth another $74 million. The EU recently contracted for 500,000 remdesivir courses over the next six months, but the deal does not require purchases.

Gilead sells and licenses remdesivir to most of the world but is expected to get the vast majority of revenue from the United States and Europe.

Johanna Mercier, Gilead’s chief commercial officer, acknowledged that “hospitalization rates were much lower than originally predicted.”

“A lot of people were worried about the supply and wanted to keep remdesivir for their worst-case patients,” she said.

She declined in an interview to discuss Gilead’s sales expectations, but said some of the excess U.S. supply was soaked up by HHS for stockpiling, and some was diverted to Europe.