Gilead pays J&J $320M to exit seladelpar licensing ahead of FDA decision

Gilead Sciences has recently made a strategic financial move by paying Johnson & Johnson (J&J) $320 million to terminate a long-standing licensing agreement for the liver disease drug seladelpar. This decision abolishes Gilead’s responsibility to pay an 8% royalty on future sales of the drug. The original licensing agreement dates back to 2006 when J&J had taken on the task of patenting seladelpar on behalf of CymaBay Therapeutics. Gilead acquired CymaBay earlier this year for $4.3 billion, a move that positioned seladelpar for approval to treat primary biliary cholangitis (PBC), a chronic autoimmune liver disease.

An FDA decision on the approval of seladelpar is anticipated by August 14, and Gilead is preparing for an immediate product launch, according to Chief Commercial Officer Johanna Mercier. “We are leveraging our existing commercial infrastructure in liver diseases to swiftly bring seladelpar to the 130,000 individuals in the U.S. affected by PBC who have not responded to initial treatments,” Mercier stated.

Primary biliary cholangitis (PBC) is a progressive autoimmune disease characterized by the impaired flow of bile and the accumulation of bile acids in the liver, which leads to inflammation and fibrosis. Over time, patients with PBC experience increasing fatigue and a severe itching known as pruritus. If untreated, PBC can necessitate a liver transplant or result in premature death. The disease predominantly affects women aged 30 to 60.

Analysts' consensus compiled by Bloomberg earlier this year estimated that seladelpar could achieve peak annual sales of $1 billion. Upon approval, seladelpar will compete directly with Intercept Pharmaceuticals’ Ocaliva, which has been on the market for PBC since 2016. Before Intercept was acquired by the Italian private company Alfasigma last year, it projected that Ocaliva’s sales for 2023 would fall between $320 million and $340 million. Additionally, just two months ago, French pharmaceutical companies Genfit and Ipsen received approval for their PBC treatment, Iqirvo.

The financial maneuver by Gilead to pay $320 million to J&J signifies the company's confidence in seladelpar's market potential. By freeing itself from the royalty obligation, Gilead has potentially increased its future revenue from the drug, assuming FDA approval is secured. This move also highlights Gilead's comprehensive strategy to strengthen its position in the liver disease market, building on its existing commercial networks and leveraging relationships to facilitate a swift and broad distribution of seladelpar.

In summary, Gilead Sciences is on the brink of a significant milestone with the anticipated FDA approval of seladelpar for PBC. The company’s recent $320 million payment to exit its licensing deal with J&J underscores its commitment to maximizing the drug's commercial potential. By doing so, Gilead aims to address a critical need for patients with PBC, enhancing their treatment options and potentially improving their quality of life.