Gilead Delivers Once Again - Analyst Blog
December 06 2011 - 9:15AM
Zacks
One of the world's largest drug makers Gilead Sciences,
Inc. (GILD) is riding on the crest of a series of
successes. In the third quarter 2011, Gilead announced that the two
late stage trials (study 102 and study 103) of its most anticipated
HIV pipeline candidate Quad pill (a combination of Gilead pipeline
candidates elvitegravir and cobicistat and its marketed HIV drug
Truvada) met the primary endpoint. Gilead filed the new drug
application (NDA) for approval of Quad in late October 2011.
A couple of months earlier Gilead received approval for
Complera, a fixed-dose combination of Truvada and Johnson
and Johnson’s (JNJ) new HIV drug Edurant. In late November
2011, Gilead received European approval for the Truvada/Edurant
combo pill which will be marketed as Eviplera there.
Latest Announcement
Now, Gilead has announced that its investigational boosting
agent cobicistat met the primary endpoint in a late stage study
(study 114) comparing cobicistat−boosted Reyataz plus Truvada with
ritonavir−boosted Reyataz plus Truvada. Cobicistat, which is
currently in late stage trials, is a booster for protease
inhibitors for the treatment of HIV. Boosting agents like
cobicistat or the current market leader ritonavir help in the
making of combination pills which can be dosed once-daily by
increasing the blood levels of certain HIV medicines.
Bristol-Myers Squibb’s (BMY) drug Reyataz is
indicated to be used in combination with other drugs for the
treatment of HIV.
Does the cobicistat data help Quad?
The data presented showed that after a 48-week period of
treatment, the cobicistat arm proved to be non-inferior to the
ritonavir arm, the primary endpoint of the study. 85% of the
patients in the cobicistat arm achieved a viral load reduction
(less than 50 copies/mL) versus 87% of those in the ritonavir arm.
This study, along with other studies which use cobicistat, will
support the filings for cobicistat as a stand-alone agent. An NDA
filing for stand-alone cobicistat is expected in the second quarter
of 2012. Since cobicistat is a key component of Quad, positive
cobicistat data reduces the risk for approval of Quad.
Our Recommendation
We currently have a Neutral recommendation on Gilead. The stock
carries a Zacks #3 Rank (short-term Hold rating).
We are optimistic about the growth potential of Gilead’s HIV
franchise drugs, Truvada and Atripla. Moreover, Gilead’s strategy
of creating fixed-dose combinations of existing HIV drugs has
yielded enormous success. We believe the positive outcomes of two
late stage trials of Quad pill will lead to its approval.
Subsequent to regulatory clearance, Quad has the potential to reach
blockbuster status and become a market leading HIV medicine. We are
also encouraged by the approval of Complera/Eviplera, which
together with Quad, once approved, will further fortify the HIV
franchise and help mitigate the impact of the upcoming patent
expirations. We are nonetheless concerned about patent challenges
against its key HIV drugs. We maintain a cautious stance until
Complera/ Eviplera along with the current pipeline proves its
worth, compensating for lost revenues from patent lapses.
BRISTOL-MYERS (BMY): Free Stock Analysis Report
GILEAD SCIENCES (GILD): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
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