UPDATE: J&J, Gilead Sign Deal For Combination HIV Therapy

Gilead Sciences Inc. (GILD) and Johnson & Johnson (JNJ) agreed to develop a new combination HIV drug, and are in talks to further expand their partnership on drugs for the virus causes AIDS.

The companies plan to develop a single-tablet combination of J&J's Prezista drug with Gilead's experimental drug cobicistat.

Prezista, which has been on the market since 2006, is a so-called protease inhibitor designed to treat HIV infection and is taken with the drug Norvir, in combination with other antiretroviral agents.

Gilead has been testing cobicistat as a "boosting agent" to enhance blood levels of certain other HIV drugs. The companies plan to combine Prezista with cobicistat in a single table that can be taken once daily.

J&J will be responsible for the formulation, manufacturing, registration, distribution and commercialization of the combination drug worldwide. Gilead will retain sole rights to manufacture, develop and commercialize cobicistat as a stand-alone product and for use in combination with other agents.

Gilead will receive a flat royalty as a percentage of net sales of the combination product, if it reaches market, minus the supply price of the cobicistat active ingredient contained in those net sales, said spokeswoman Erin Rau.

In addition, J&J and Gilead are negotiating terms for the development and commercialization of a single-tablet regimen combining several components: Prezista, Gilead's Emtriva and Gilead's experimental drugs GS 7340 and cobicistat.

Piper Jaffray analysts said the new deal was a modest positive for J&J as it builds a franchise in HIV medications. They said it's difficult, however, to assess the financial impact on J&J until the negotiations on the single-tablet regimen are complete and terms are disclosed.

For Gilead, the deal further extends the company's dominance in HIV therapies, according to Lazard Capital Markets analyst Joel Sendek. Gilead's HIV drug Atripla had sales of $2.93 billion for 2010, while Truvada sales were $2.65 billion.

The moves would expand a partnership between J&J and Gilead formed in 2009. Under that deal, the companies developed a combination of Gilead's Truvada HIV drug and J&J's Edurant.

Earlier this year, Gilead re-submitted an application for U.S. Food and Drug Administration approval of the Truvada-Edurant combination, after the FDA said the initial application didn't contain sufficient information. An FDA decision is expected by mid-August. The FDA approved Edurant as a stand-alone drug in May.

Shares of Gilead rose 2.3% to $41.10, while J&J was up 1.3% at $66.09 in recent trading.

-By Peter Loftus, Dow Jones Newswires; +1-215-982-5581; peter.loftus@dowjones.com

Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From May 2024 to Jun 2024