Gilead Sciences Inc. (GILD) recently announced that its key HIV pipeline candidate elvitegravir met the primary endpoint in a late-stage trial (145 study). Elvitegravir is an oral integrase inhibitor, which is being evaluated in treatment-experienced HIV-1 patients.
The primary endpoint of the study was to assess the non-inferiority of ritonavir-boosted elvitegravir dosed once daily, as compared to Merck’s (MRK) Isentress dosed twice daily. Elvitegravir was shown to be non-inferior to Isentress at week 48 in viral load reduction. The data will be presented at a scientific conference later in the year.
In January this year, the company had extended the period of the study to 96 weeks to gain longer-term efficacy and safety data to support the regulatory filing of elvitegravir as well as the Quad pill. The latter is a fixed dose combination of four Gilead drugs, elvitegravir, cobicistat, and Truvada (made up of Emtriva and Viread). The Quad pill is also being studied for the treatment of HIV.
Gilead hopes to use the 48-week data from the elvitegravir study for regulatory filings for both elvitegravir and the Quad pill. We are encouraged by the recent data and believe it removes some of the risks associated with the development of the Quad pill.
Data from phase III trials of the Quad pill are expected to be presented in the second half of 2011, which we believe will be one of the most significant events for the company this year.
Our Recommendation
Currently, we have a Neutral recommendation on Gilead which is supported by a Zacks #3 Rank (short term hold). We remain optimistic on the growth potential of Gilead’s HIV franchise drugs, Truvada and Atripla, as well its strong HIV pipeline. However, the company’s HIV drugs are facing patent challenges from generic companies. Besides, the issues raised by the FDA regarding contamination at Gilead’s San Dimas production facility could add further pressure on the company’s top-line. Gilead’s revenues also continue to be unfavorably impacted by pricing pressures in Europe and currency fluctuation.
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