In this clip from "The Pharma & Biotech Show" on Motley Fool Live, recorded on Feb. 2, Motley Fool contributors Brian Orelli and Keith Speights discuss the major lawsuit between Gilead (GILD -0.32%) and [GlaxoSmithKline (GSK 0.22%) majority-owned] ViiV Healthcare and analyze what effects the resulting settlement might have on future profits.
Brian Orelli: I think four things to watch in 2022 is Trodelvy, which has four Phase III clinical trials happening, three in breast cancer and one in lung cancer. That has the potential to grow sales of Trodelvy quite a bit. They have another Phase III for Magrolimab that's not on the market yet, but they're looking to get it into acute myeloid leukemia if that Phase III clinical trial is successful. Then, on the CAR T-cell therapy side, Yescarta, they're looking for U.S. approval for large B-cell lymphoma. That would expand sales in the United States. Then, they are looking to get an approval in the EU for follicular lymphoma in the first half and then Large B-cell lymphoma in the second half of the year. That has the potential to expand just CAR T sales substantially. Gilead, I think this quarter, just exemplifies what's been happening for the last couple of years. It just seems like it's just a wait-and-see kind of company.
Keith Speights: Gilead, the company gets ahead of steam, but it just can't sustain it. I think we're seeing that with declining sales of Veklury. There's even more negative news that I saw come out yesterday. The story broke that Gilead and ViiV Healthcare, which is an HIV company that's majority-owned by GlaxoSmithKline, GlaxoSmithKline's ticker is GSK, by the way. They were in a lawsuit and they settled. And as a result of that settlement, Gilead is going to pay ViiV $1.25 billion in cash and it's going to pay a 3% royalty on all U.S. sales of Biktarvy through October 2027. Of course, Biktarvy is really its main HIV drug. Now, Biktarvy has cannibalizing sales of the older HIV drugs. That's going to probably impact Gilead profits at least somewhat over the next few years.
Orelli: That was a big settlement.
Speights: GlaxoSmithKline or ViiV, of course, compete in HIV. This lawsuit was over one component of Biktarvy, Bictegravir, and ViiV maintained that that infringed on one of its patents for its HIV drug, dolutegravir. It looks like Gilead may not have admitted, but they realized that settling was the best way to go here, but it's going to cost them.
Orelli: But sometimes settling is better than letting the courts decide and gambling there because it probably would have ended up with a lot more. It's a risk-adjusted issue and they've decided that it was worth taking the guaranteed amount than risking having a higher amount imposed by the courts.
