Remdesivir: A Classic Analysis of Desperate Measures During Desperate Times

1. WHITEPAPER RemDESivir A classic analysis of DESperate measures during DESperate times A classic analysis of DESperate measures during DESperate times 1 www.sganalytics.com | www.sganalytics.com

2. SGA Analysis • Was the surge in demand for remdesivir, as a COVID-19 drug, more due to market preferences, perception, and push by few people? • How did the chain reaction start (approval process) that led to a surge in demand in the global market? • How much actual scientific data promoted this surge? • How was the social media perception, influencer perception, and public opinion interpreted? • Does data create a demand for drugs or perception creates data? Which one is more credible? Disclaimer: SG Analytics does not intend or claims to highlight any company or any person who might be involved with the recent surge of remdesivir demand in the global market. It would not like to be associated with any positive or negative news, nor does it echo any sentiments made by media. The report only highlights the analysis of public sentiments, perceptions, and reactions of the industry available in the public domain and echoes the power of information and data that can make or break drug sales. Millions of dollars were transacted on a drug that was not backed by enough medical research or data. Health economics and outcomes research (HEOR) projections, global trials, and evaluations were missing before the hype around remdesivir was created in April 2020. A classic analysis of DESperate measures during DESperate times 2 www.sganalytics.com |

3. Why is “Remdesivir” a classic example of perception-driven sales in the pharma world? The rise of remdesivir in 2020 is a classic example of what social media sentiments, medical data (or sales without medical data), and public perception are capable of doing in desperate times. The drug was granted emergency use authorization (EUA) by the FDA in May 2020, which led to a surge in its stock prices. The company was traded by many in this time period. It also promoted a war of collaboration among key players. Pharma companies and CMOs across the globe were trying to collaborate on local production of the same drug under license. The market was gearing up for a demand that was created based on multiple Ps. Surprisingly, the drug still does not have full approval but that does not matter. It is already part of the emergency protocol for hospitalized patients across the world. When COVID-19 was declared a global pandemic, the whole world entered a phase of chaos while trying different drugs on mild to severe cases, including anti-viral drugs and anti-infective drugs available for other indications. At some point, it was a political tussle over anti-malarial drugs, while in some cases, drugs indicated for rheumatoid arthritis, edema (dexamethasone) were tested without any medical evidence against the virus. The rise in demand of “Remdesivir” will be considered as a case study in many marketing books as it was promoted by public, promoters, and pharmaceutical companies at the same time. It was prescribed for severe to very severe cases infected by coronavirus (COVID-19 strain). The three “P” were perception, preferences, and push that drove more drug sales and in turn benefited few while risking the lives of many. Companies such as Gilead changed its sales forecasts totals for 2020 from earlier projected USD21.8 billion to USD22.2 billion to the new forecast of USD23 billion and USD25 billion. A classic analysis of DESperate measures during DESperate times 3 www.sganalytics.com |

4. The stock fluctuations due to Perception, Preferences, Push, and more • Gilead’s stock was up by about 13% between February 1 and March 12, after the WHO declared a global health emergency Considering the past performance of Gilead, the revenues had been on a decline over the last few years, primarily due to its HCV (Hepatitis C Virus) drugs that were trending lower amid increased competition from other drugs. The company’s bottom line also declined from USD10.10 (2016) to USD4.20 in 2019. However, things were different this year. • As soon as Dr Anthony Fauci uttered the magic words (promoting remdesivir), stock markets surged. One push was enough to set the market rolling without data. • Investors who were more risk-averse preferred Gilead Sciences over other corona stocks. Gilead is considered profitable, has multiple blockbuster products on the market already, and pays dividend. Gilead: how data from remdesivir trial become a proxy for investor sentiment • The stocks picked up for a short time (April–May) were then lost to Moderna (working on the COVID vaccine). What led to this surge and fall – perception, preference, or push? Source: Bloomberg ©FT A classic analysis of DESperate measures during DESperate times 4 www.sganalytics.com |

5. The Perception Public including physicians who voiced their concerns on Twitter, print media, LinkedIn, or other platforms showed that either they were not sure about the efficacy or were quick to react once WHO claimed the trial results led to no or limited impact of remdesivir on COVID-19 patients. Overall, they did not seem to be convinced. Voices, Concerns, and Public Opinion Gilead received the Solidarity manuscript ruling out a big impact from remdesivir on #covid19 mortality on 28 September according to @WHO Source Outreach 455 Retweets 65 Quote Tweets 839 Likes Twitter (October 16, 2020) On 8 October, before the results became public, Gilead signed a billion dollar deal with the EU Commission for remdesivir. So, has #remdesivir shown a survival benefit? I remember @icer_review Twitter (October 16, 2020) 71 Retweets 3 Quote Tweets 247 Likes suggested that without a survival benefit the price should be about $310. The drug costs $3,120 now. Am I missing something or are we getting price-gouged (again) by @GileadSciences? Pre-print of WHO SOLIDARITY RCT: Remdesivir, Hydroxychloro- quine, Lopinavir, and Interferon in 11,266 hosp’d pts with COVID from 405 hosps in 19 countries – no differences in mortality with any regimen. Must wait for peer review – nonetheless disappointing. Twitter (October 18, 2020) 11 Retweets 1 Quote Tweet 30 Likes “I am not terribly impressed with the study and remain “skeptical” about using remdesivir in patients with moderate COVID-19, espe- cially given the price” Reuters September 12, 2020) Dr. Adarsh Bhimraj, an infectious disease specialist at the Cleveland Clinic The Preferences The industries (pharma and hospital) on the other hand were just waiting to grab this opportunity. From May 2020 till August 2020, the pharma world witnessed the hottest deals and collaborations. Although everyone was under lockdown, yet beneficiaries spread across 127 countries got access to Gilead’s remdesivir. Gilead Sciences had signed a licensing agreement with drugmakers Mylan, Cipla, Ferozsons Laboratories, Hetero Labs, and Jubilant Lifesciences, making it possible for all the key players to spread the reach of the drug. Hospitals modified their facilities to accommodate more. Many included remdesivir as part of their protocol for limited use in severe to very severe COVID-19 cases. Background of Influencers K.I. Varaprasad Reddy, (Founder, Shantha Biotechnics) Industry Preferences for Remdesivir Source “Though a multinational, randomised placebo-controlled trial observed reduced time to recovery from severe Covid-19 with use of Remdesivir, another study conducted in China reported conflicting results. Deccan Chronicle Newspaper (India), India: July 5, 2020 The drug shouldn’t be used in patients having hypersensitivity to any ingredients of the formulation, patients with gross liver enzyme and renal function abnormalities” “At this point, we are buying far more than we are using because we are unsure about what will happen at the end of September” Reuters September 12, 2020 Katherine Perez, Infectious Disease Pharmacist, Houston Methodist, USA “If it prevented people from dying, there would be a different demand.” Washington Post, September 30, 2020 Heather Pierce, Senior Director for Science Policy and Regulatory Counsel, Association of American Medical Colleges A classic analysis of DESperate measures during DESperate times 5 www.sganalytics.com |

6. The Push The US pharmaceutical market always led others and this time also, the adoption of remdesivir in the US led to a chain reaction in other markets. Japan followed by India, the European Union, and more followed this month after month. Ultimately, there were reports of high demand and drug shortage. One push worked for the drug, globally, without much scientific evidence. Decisions that impacted Remdesivir had a “clear-cut, significant and positive effect in diminishing the time to recovery.” Source Impact on the market US becomes the first market to start the usage of Remdesivir based on a small trial result Hospitals in the US could directly purchase the drug from October 1, 2020 NIAID Director Anthony Fauci “To the extent possible, we want to ensure that any American patient who needs remdesivir can get it. The Trump Administration is doing everything in our power to learn more about life-saving therapeutics for COVID-19 and secure access to these options for the American people.” Alex Azar, Department of Health and Human Services (June 29, 2020) Approvals (Partial Approvals) of Remdesivir in the Corona-Hit Global Market, 2020 On October 15, 2020, Russia too approved the drug majorly influenced by the fact that the US president was treated by remdesivir. A classic analysis of DESperate measures during DESperate times 6 www.sganalytics.com |

7. The DESperation to sell in desperate times Gilead’s pivotal Phase III clinical trials of remdesivir did not meet its initial primary endpoint, i.e. reduction in COVID-19 death rates. The company is still promoting that it can make a difference by reducing the hospital stay of patients. It has been claimed that remdesivir could reduce the number of hospitalized days from about 15 to 11 and that was considered good enough to be introduced as part of the regular treatment protocol. The company’s sales team has already partnered with regional players as well as other generic companies to distribute in low-to-middle-income countries. This is expected to support another sales surge between USD1 billion and USD3 billion in 2020 alone. Primarily driven by the National Institute of Allergy and Infectious Diseases (NIAD) led by Dr. Anthony Fauci and the U.S. Food and Drug Administration, it was made to believe that it is a knockout drug to counter coronavirus (as reported by The Washington Post). The public sentiments were not far behind. One market drove another and the drug reached 127 countries through various deals. Although the world debated its efficacy, someone made all the money. Despite issues with efficacy, the company went ahead with its billion dollar EU deal in October, when they were well aware of the results of the SOLIDARITY study by September 28, 2020. This is a classic example of desperate measures at a desperate time and all because the global market was desperate to get a cure from COVID-19. Currently, the drug’s manufacturer Gilead is in denial mode and does not accept the findings of the trial. In a statement issued by the company, Gilead said the findings of the study were “inconsistent” with others, and it was “concerned” that the results have not been reviewed properly. Looking at the brighter side of the sales picture. The drug is expecting another surge or new wave (just like COVID-19) in Europe during October–November 2020 and this time even the media supports this theory. Source: Twitter (October 17, 2020) As Covid-19 surges across Europe, remdesivir, one of the medications shown to help treat the coronavirus, is facing a drug shortage A classic analysis of DESperate measures during DESperate times (NBC News, October 17, 2020) 7 www.sganalytics.com |

8. The fluctuation in the selling price of Remdesivir As per the CEO Daniel O’day’s official communique, the company had planned to tag a price of USD520 per vial for US payers and USD390 for government payers outside the US, the latter price being designed to avoid the need for country-by-country pricing negotiations. However, SG Analytics observed price variations in spite of tall claims. Grey markets in India sold the same drug at much higher prices. The shortage of remdesivir in Europe is pushing the market toward gray. Region Per Treatment Cost India INR45,000 (USD613) USD3,200 (Government hospitals pay a discounted rate of about USD2,340) USA UK GBP1,900 (USD2,449) UAE USD2,340 Fate of Remdesivir in COVID-19 cure There is no conclusive evidence that the drug could actually cure even the severest cases of COVID-19, as all it claims is the reduction in hospital stays. Is that enough to be made part of the treatment protocol across 127 countries. What about the mortality rates? It may have worked on some, but in majority it has shown no or limited efficacy. Patients who have spent out of pocket or even co-paid with insurance had borne the price of a “Hope” with a lot of disappointment and no results. Perception drives decision or otherwise, we would not like to comment on that. Just like how no one will ever question the origin of the deadly virus and how it came into existence The curious case of the surge of remdesivir will be forgotten similarly. Thousands of dollars were traded in the share market in between April and October, after Gilead showed promising results. Governments overspent their treasuries in purchasing kits and medicines. There were billions of dollars that were traded in this pandemic, but nobody is clear who made the money. A classic analysis of DESperate measures during DESperate times 8 www.sganalytics.com |

9. There are some uncomfortable questions before us that nobody will answer. • The results of the SOLIDARITY study were out by end of September 2020 and WHO claims that this drug had little or no effect against COVID-19. The social media picked up the news and debated. Still, the European Union signed a deal on October 8, with an intent to purchase the same drug and the ticket size was in billions. • According to HHS, the US had secured >500,000 treatment courses of remdesivir in September 2020. This has exhausted the stock of Gilead for 3 months. Will these stocks be still used on patients in October and going forward? • The US Government-led distribution of remdesivir will expire at the end of September. Hospitals said they have little information on its availability after that. Will there be shortage? Who checks on the overstock of the same in hospitals? • Ukraine, India, Switzerland, Japan, and more countries have added remdesivir in their treatment protocol for severe to critical patients (or restricted its use). The drugs from key companies (deals with generic and pharma players in 127 countries) will be available soon What happens to the surplus stock? • The Washington Post quoted Gilead CEO Daniel O’Day who had stated in June 2020 that the company could have charged more for remdesivir, considering that cutting hospital stays by four days would save hospitals USD12,000 on average. But the price tag for a course of treatment triggered outrage among congressional and state government critics who cited a study that said the company could break even by charging less than USD1 per vial. Although the company pledged to give 1.5 million doses for free till end of May, majority of large deals (the EU deal was signed on October 8, US hospitals are expected to buy from Gilead from October) happened only after the initial charity was over. It is clear that someone made money and the world was desperate to fund and find a solution for COVID. • Recently, HEOR has put the cost of COVID intensive-care treatment at around USD20,000. If the drug shortens an ICU stay by 30%, then there might be a justification for a USD5,000 price for the drug. Remdesivir may have a chance in supporting therapy to cut down the cost of care. Decision makers and promoters of the market did not consider projections, trends, and numbers. Clinical trials were not complete, when this entire chaos was created. Everything happened without patience, data, and numbers. When decisions are taken with no or little data, the impact is severe. At a time when recession has hit major and minor markets alike, billions of dollars have been transacted in the market with inconclusive results. Can we really afford such luxuries in future? SG Analytics tracks clinical trials data across the US, Europe, Japan, India, South Korea, Australia, China, and 150 registries. We help companies with HEOR studies, as well as trial research studies, to come out with best Competitive intelligence clinical trial results. Data is important for this industry and there is no denial in that. A classic analysis of DESperate measures during DESperate times 9 www.sganalytics.com |

10. About the Authors Dr. Siddhartha Dutta, Practice Head, Pharmaceutical & Life Sciences Practice Dr. Siddhartha Dutta has been working in the Healthcare industry for the last 21 years. He has been involved with clinical trials, medical research, planning, and various roles in public and private healthcare domains. Besides working as a medical microbiologist, he has worked extensively in markets such as USA, Western Europe, India, Australia, Japan, Singapore, South Korea, Indonesia and has helped OEMs, VCs, banks and pharmaceutical companies expand their businesses in USA, EU and LATAM markets. Dr Dutta is an avid blogger, writer and industry speaker. His market outlooks have been published by various business magazines for the last 5 years. He has been quoted in more than 70 publications worldwide. Dr Dutta has tried to evaluate the global COVID-19 situation, and specially focused on the American businesses which might flourish or perish in these critical times. The whitepaper is relevant for all the healthcare industry stakeholders who supply medical devices or pharma products to the US market. New York | Seattle | Austin | London | Zurich | Pune | Hyderabad About SG Analytics SG Analytics is one of the leading research and analytics companies to offer of data-centric research and contextual analytics services. With its presence in the US, the UK, Switzerland, and India, SG Analytics offers research and analytics services its customers across the globe. Awarded the ‘Regional Best Employer’ by the World HRD Congress for straight three years – 2016, 2017, and 2018, SG Analytics’ collegial atmosphere and knowledge-based ecosystem help to consistently meet and exceed customer expectations. For further information, please visit our website: sganalytics.com Join the conversation This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by SG Analytics (SGA) and is not intended to represent or imply the existence of an association between SGA and the lawful owners of such trademarks. Information regarding third-party products, services, and organizations was obtained from publicly available sources, and SGA cannot confirm the accuracy or reliability of such sources or information. Its inclusion does not imply an endorsement by or of any third party. Copyright © 2020 SG Analytics Pvt. Ltd. A classic analysis of DESperate measures during DESperate times www.sganalytics.com 10 www.sganalytics.com |