Gilead Asks FDA To Withdraw Orphan Drug Tag For Remdesivir

 | Mar 26, 2020 06:16AM ET

Shares of Gilead Sciences, Inc. (NASDAQ:GILD) were down 5.8% after it reportedly asked the FDA to rescind the Orphan Drug designation granted to its experimental drug, remdesivir, for the treatment of COVID-19.

On Mar 23, 2020, the agency had granted remdesivir the Orphan Drug designation for the treatment of COVID-19.

Gilead had initiated two phase III studies to evaluate the safety and efficacy of remdesivir in adults diagnosed with COVID-19. These randomized, open-label, multicenter studies will enroll approximately 1,000 patients at medical centers primarily across Asian countries.

The studies will assess two dosing durations of the candidate, administered intravenously. Reportedly, remdesivir is already being used in the United States for the treatment of the disease under federal rules that allow the use of unapproved drugs on compassionate grounds.

The candidate was previously under testing for the Ebola virus. As the candidate has shown promising results in the infected patients, investors are banking on Gilead for being the first company to come up with a treatment for this deadly disease.

We note that the Orphan Drug designation is generally granted to drugs being developed for rare diseases, which affect less than 200,000 persons in the United States. The designation gives special tax and market exclusivity incentives.

However, Gilead has asked the agency to revoke the same after facing criticism to seek benefits amid a global health crisis.

The biotech was earlier accused of exorbitant pricing of its HCV drugs.

We note that there are currently no FDA-approved treatments for the severe illness caused by SARS-CoV-2. Given the alarming levels of spread and severity, some approved drugs or pipeline candidates are being tested to see if they are effective in treating infected patients.

Gilead’s shares have gained 7.2% this year so far against the industry ’s decline of 13.4%.