Gilead has been in Mercury retrograde in the past two years. Apart from long-acting HIV therapy, there is almost no good news, especially in the anti-tumor field where Gilead continues to increase its layout. It can even be said that the harder it tries, the more disappointed it is. Not only has it suffered a lot in the layout of TIGIT, but since this year, Trodelvy has failed in clinical trials, resulting in a high probability that the $21 billion acquisition of Immunomedics will be difficult to recover, and the $4.9 billion investment in the CD47 field is even more lost.

Of course, even after paying a huge tuition fee, Gilead is still fighting for growth, active in the field of tumor BD, betting on new products and new technologies. At present, compared with these earlier bets, Gilead obviously hopes to win again with CAR-T. Recently, the clinical data of BCMA CAR-T therapy anito-cel announced by its partner Arcellx at the ASH meeting has made Gilead more confident in surpassing Legend Biotech.

Anito-cel, which focuses on safety, is highly anticipated by Gilead, which believes that it will be a BIC product; coupled with Kite's existing large-scale production capabilities and CAR-T commercialization network, it believes that anito-cel has the ability to compete in the nearly 100 billion CAR-T market.

Will Gilead get its wish this time?

The acquisition of Kite for $11.9 billion in 2017 was a key move for Gilead to turn to the field of oncology, which enabled it to obtain Yescarta, the only CAR-T therapy approved for marketing in the world, and became the leader in global cell and gene therapy. Yescarta has also become the leading actress in Gilead's oncology sector, and has outperformed competitors such as Novartis and Bristol-Myers Squibb. In 2022, Yescarta crossed the $1 billion threshold for the first time, with sales reaching $1.16 billion. Sales continued to rise in 2023, with a year-on-year increase of 24% to $1.5 billion. As a drug, Yescarta has been very successful.

Another CD19 CAR-T therapy, Tecartus, also contributed $370 million in sales to Gilead in 2023. It can be said that Gilead is in the limelight in the CAR-T track. Of course, compared with Gilead's mergers and acquisitions of over $10 billion, the potential released is far from enough. However, at present, there are as many as 5 CD19 CAR-T therapies approved for listing in the United States. In the fierce market competition, Gilead's CAR-T therapy seems to be starting to sell poorly.

This year's third quarter report shows that Yescarta and Tecartus have a total sales of $1.486 billion, a year-on-year increase of 6%. However, if we look at the third quarter alone, Yescarta and Tecartus have sales of $387 million and $98 million, respectively, down 7% and 8% month-on-month, respectively. In this regard, Gilead said that the decline in sales was due to fierce competition in and outside the United States, and it is expected that this competition will continue until 2025. The company will work with government agencies and healthcare associations to continue to focus on expanding the overall use of Yescarta and Tecartus.

In contrast, Yescarta's direct competitor Breyanzi is still growing rapidly due to better safety performance and expanded indications. In the third quarter, Breyanzi's sales reached US$224 million, a year-on-year increase of 143%, and the total sales in the first three quarters reached US$484 million, a year-on-year increase of 84.03%.

Tecartus also has to face the catch-up of the new generation of CD19 CAR-T therapy in the field of acute lymphoblastic leukemia. In mid-November, the CD19 CAR-T therapy Aucatzyl developed by Autolus was approved by the FDA for the treatment of adult patients with relapsed/refractory adult B-cell acute lymphoblastic leukemia.

Although the price of US$525,000 is significantly higher than Tecartus's US$460,000, Aucatzyl is the first CAR-T therapy approved by the US FDA that does not require a risk assessment mitigation strategy plan due to its safety advantages. Therefore, Autolus is quite optimistic about future commercialization. Fortunately, Gilead has a new CAR-T bet.

As the CD19 CAR-T field is advancing rapidly, Gilead has also set its sights on another major target, BCMA. Although there is already a strong opponent in this field, Carvykti. In December 2022, Gilead took a fancy to an innovative cell therapy company called Arcellx, and signed a cooperation and licensing agreement with it through Kite. At a cost of $225 million in down payment, up to $3.9 billion in milestones, and a total transaction amount of $4.125 billion, it obtained the qualification to jointly develop the BCMA CAR-T product anito-cel with it.

The reason why Gilead bought anito-cel, which is only in clinical phase 2, for more than $4 billion is because its early 100% ORR data is a bit too dazzling. Compared with Carvykti, anito-cel's data is not inferior. In fact, anito-cel clinically selected more difficult-to-treat patients, and on this basis, it obtained better research data. Ideally, as long as anito-cel can maintain such data, it will be the new king of the CAR-T field if it is successfully launched, and there is no need to worry about its commercialization.

In November 2023, Gilead added another $285 million to expand its cooperation with Arcellx and obtained the latter's research and development license for ACLX-001. Obviously, Gilead has high hopes for Arcellx's technology. Arcellx overcomes some limitations of traditional cell therapy programs by designing a new class of D-Domain-driven autologous and allogeneic CAR-T cells, including the classic single-infusion CAR-T (called ddCARs).

According to Arcellx, D-Domain is a small, stable, fully synthetic conjugate with a hydrophobic core. When used in CARs, its unique structure may achieve higher transduction efficiency, higher cell surface expression, and lower tonic signaling, and is designed to improve target specificity while enhancing binding affinity. The ddCAR consists of an intracellular T cell signaling domain similar to traditional CAR and D-Domain, and D-Domain serves as the extracellular antigen binding region. That is, by adopting a new synthetic binding skeleton D-Domain, the scFv in CAR-T is replaced as the antigen binding domain.

This may bring it efficacy and safety advantages. In fact, with the support of technology and early data, Arcellx originally planned to submit a BLA application directly to the FDA after the end of the anito-cel Phase 2 clinical trial iMMagine-1, striving for accelerated approval. However, due to the sudden death of a patient, the iMMagine-1 study was stopped by the FDA. According to Arcellx, the cause of the patient's death may be the defect of bridging therapy. But putting this aside, it may also be related to its overly difficult clinical trial design. Gilead and Arcellx hope to obtain higher quality clinical data by enrolling more and more difficult patients in order to obtain faster approval, but it has the opposite effect. Fortunately, the FDA subsequently lifted the clinical suspension of anito-cel, and from the latest data, Arcellx's persistence and adventure do not seem to be in vain.

At the 2024 ASH conference, in addition to the great attention paid to BTK inhibitors, another topic that has attracted much attention is whether anito-cel can challenge Carvykti. As early as when Arcellx released the summary data, some analysts were optimistic about the potential of anito-cel for BIC, and perhaps it will become a strong competitor to Carvytki in the future. However, judging from the data finally released at the ASH conference, the efficacy seems to be inferior to Carvytki. Preliminary results of 86 patients participating in the pivotal iMMagine-1 study of anito-cel Phase 2 showed that at a median follow-up of 9.5 months, the ORR was 97%, and the CR/sCR was 62%; the median PFS was 30.2 months, the median follow-up time was 38.1 months, and the median overall survival was not reached.

Although cross-clinical comparisons are not accurate, according to the Legend Biotech CARTITUDE-1 study, at a median follow-up of 27.7 months, the ORR of 97 RRMM patients was 98%, 83% were strict complete remission (CR), and the mPFS was 34.9 months. Obviously, Carvytki has a larger sample size and a longer mPFS time. Perhaps in response to the market's concern about PFS, Professor Ciara L. Freeman specifically mentioned in the investor communication at ASH when introducing the iMMagine-1 study: By extending the follow-up period, the median progression-free survival of treated patients reached 34 months. Of course, compared with efficacy, anito-cel advocates its safety more.

As we all know, CAR-T therapy often brings side effects such as neurotoxicity and CRS (cytokine syndrome). So far, no delayed neurotoxicity of anito-cel has been observed in more than 150 patients who were given the drug in Phase 1 and iMMagine-1 studies, including no Parkinson's syndrome, no cranial nerve palsy, and no Guillain-Barré syndrome. CRS is also relatively better, with 84% (49/58) of treated patients experiencing CRS events and 2% (1/58) of patients experiencing grade 3 or higher CRS events.

However, anito-cel still cannot avoid CRS-related deaths, and the market is concerned about whether anito-cel can remain as safe as before when clinical trials are expanded and extended. Whether it is me too or BIC is obviously directly related to the commercialization prospects of anito-cel as a latecomer. On this point, both Arcellx CEO and Kite Vice President Cindy Perettie said in an interview that based on the existing data, they believe that anito-cel is an absolute best-in-class product. And Cindy emphasized that based on Kite's development expertise and its ability as a global leader in cell therapy manufacturing, "We have shortened the global turnaround time to 14-19 days, and these experiences will be applied to the construction of Arcellx." As a direct comparison, both Johnson & Johnson and Legend Biotech executives strongly defended Carvykti during the ASH meeting, believing that comparing it with anito-cel "is flawed because there are obvious differences in sample size, population and follow-up before the data is released." Legend Biotech CEO even said in his speech that he firmly believes that Carvykti has been proven to be a leader in the treatment of multiple myeloma. However, compared with Arcellx's confidence, the market was not satisfied with its performance at the ASH conference, and its stock price fell 2% on Monday, probably because of concerns that the market space was not large enough. In this regard, Chris Healy, chief medical officer of Arcellx, said that everyone is asking us, wouldn't it be very difficult to compete with Johnson & Johnson and Legend Biotech? He believes that Johnson & Johnson also said that with its production capacity, it may only occupy about half of the market share, which will leave room for another competitor. The second-line and above CAR-T multiple myeloma market may eventually be worth $12 billion, and if CAR-T therapy enters the first-line treatment, the market size may be larger. But before that, Anito-cel still has to answer a question about whether the risk/benefit ratio can be improved in the future. For Gilead, this is another adventure with an unknown future. The foundation of post-emergence exogenous enhancement as the market leader of multiple myeloma makes everything uncertain.

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