Gilead /JNJ to Make HIV Combo Drug - Analyst Blog
June 30 2011 - 10:45AM
Zacks
Gilead Sciences, Inc.’s (GILD) strong HIV
franchise received yet another shot in the arm with the
announcement of a license agreement with Tibotec Pharmaceuticals, a
division of Johnson & Johnson (JNJ), to
develop and commercialize a new fixed dose combination HIV drug.
The combination drug will bring together Gilead’s pipeline
candidate cobicistat and Tibotec's protease inhibitor Prezista
(darunavir).
Cobicistat is being developed by Gilead in late stage trials as
a booster for protease inhibitors in the treatment of HIV. Gilead
is developing cobicistat, both as a stand-alone product and for use
in combination with other agents. Prezista is marketed in the US by
Johnson & Johnson for the treatment of HIV in combination with
ritonavir (standard of care) and other antiretroviral agents.
Under the agreement, Tibotec will be responsible for the
formulation, manufacturing, registration, distribution and
commercialization of the combination drug worldwide. Gilead will
continue holding the rights to develop and commercialize cobicistat
as a stand-alone product and for use in combination with other
agents. The agreement to develop the cobicistat/Prezista
combination drug is subject to the outcome of ongoing negotiations
between the two companies for entering into a second collaboration.
Under this collaboration Gilead would be responsible to develop and
commercialize a future single-tablet regimen combining four drugs
(Prezista, cobicistat, Gilead’s marketed HIV drug Emtriva, and its
HIV candidate GS 7340).
Gilead’s strategy of creating fixed-dose combinations of
existing HIV drugs has yielded enormous success. The introduction
of combination drugs Truvada and Atripla has allowed the company to
maintain robust growth in HIV product sales. Gilead is also working
on strengthening its HIV franchise further with a fixed-dose
combination of Truvada and Johnson & Johnson’s TMC278, and the
much talked about Quad pill, which is a combination of
elvitegravir, cobicistat and Truvada. The agreements with Johnson
& Johnson, if finalized, would further strengthen Gilead’s ever
expanding portfolio of fixed dose combination drugs for HIV
treatment.
Our Recommendation
We currently have a Neutral recommendation on Gilead. The stock
carries a Zacks #3 Rank (short-term “Hold” recommendation). We are
optimistic on the growth potential of Gilead’s HIV franchise drugs,
Truvada and Atripla. However, we are concerned about patent
challenges to its key HIV drugs. Hence, we maintain a Neutral
recommendation till the current pipeline proves its worth
compensating for lost revenues from patent lapses.
GILEAD SCIENCES (GILD): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
Zacks Investment Research
Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From May 2024 to Jun 2024
Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From Jun 2023 to Jun 2024