A Gilead logo on a smartphone next to a screen showing a coronavirus graphic. Picture: OLIVIER DOULIERY / AFP
A Gilead logo on a smartphone next to a screen showing a coronavirus graphic. Picture: OLIVIER DOULIERY / AFP

London — Belgian biotech company Galapagos lost about a third of its market value — its biggest decline on record — after the US Food and Drug Administration (FDA) failed to approve a rheumatoid arthritis treatment it is developing with partner Gilead Sciences.

The regulator is concerned about the benefit and risk profile of the treatment, filgotinib, and has requested more data before completing its review, the companies said in a statement on Wednesday. The FDA’s decision drove Galapagos down as much as 33%, wiping more than €3bn off its market value. Gilead shares fell as much as 4.4% in the US.

“There’s really no way to sugarcoat this very surprising development,” analysts at Barclays, including Emily Field, wrote in a note. They cut their peak sales estimate for the drug to about €527m from €1.3bn. “This is essentially the bear-case scenario playing out.”

Safety concerns could delay a US approval until at least the second half of 2021, adding risk to the drug’s regulatory prospects elsewhere, according to Michael Shah, a Bloomberg Intelligence analyst. Peter Welford, an analyst at Jefferies, called the FDA’s failure to approve the drug a “major setback”.

The shares were 24% lower at 4pm in Amsterdam on Wednesday.

“Despite today’s news, we continue to believe filgotinib has the potential to provide an effective, new treatment option for patients with rheumatoid arthritis, where there remains a significant unmet need,” Walid Abi-Saab, the chief medical officer at Galapagos, said in the statement.

Filgotinib is being reviewed by regulators around the world, and recently received a positive opinion from a European Medicines Agency committee recommending authorisation in the EU, according to the companies.

Bloomberg

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.