Gilead Sciences Inc. (NASDAQ:GILD) stock plunged 5.8% after the company reported that it had request the FDA to withdraw the Orphan Drug designation that it gave the company’s experimental drug, remdesivir as a possible coronavirus treatment.
Gilead’s remdesivir used to treat coronavirus
Early this week, on March 23rd, 2020, the FDA granted the drug Orphan Drug designation as a potential COVID-19 treatment. The company had begun two phase three studies aimed at evaluating the safety and efficacy of the drugs in individuals diagnosed with coronavirus. The open-label randomized, multicentre trials will enroll around 1,000 patients at its clinical centers across Asia.
The company will assess two dosing durations in the studies of the candidates, which shall be administered intravenously. Already remdesivir is being used in the US for the treatment of COVID-19 under federal regulations permitting the use of unapproved treatments on compassionate grounds.
The drug was previously meant for the treatment of the Ebola virus. With the drug candidate demonstrating positive result in coronavirus infected patients there is a lot of optimism from investors that the company will be the first to provide treatment for the disease that has infected over half a million people globally.
Gilead criticized of trying to profit during the crisis
Usually, Orphan Drug designation is granted to treatments under development for rare diseases that affect not more than 200,000 people in the US. This designation offers special market and tax exclusivity benefits. However, the company is now asking the FDA to rescind the tag following criticism that it is seeking benefits in the middle of a health crisis. Previously the company was accused of price gouging of the HCV drugs.
Currently, there is no FDA-approved treatment for the novel coronavirus. Considering the growing rate of spread and severity of COVID-19, there are some approved pipeline candidates and drugs that are being evaluated to see how effective they can be in the treatment of coronavirus patients.
President Donald Trump has been pushing for accelerated approval of treatments and vaccines to fight the coronavirus pandemic.
