Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
ThinkAdvisor

Portfolio > ETFs > Broad Market

After curing hepatitis C, Gilead works to vanquish more viruses

X
Your article was successfully shared with the contacts you provided.

(Bloomberg) — Gilead Sciences Inc. (Nasdaq:GILD), basking in the success of its cure for hepatitis C, is setting ambitious goals to vanquish two other major viral scourges: HIV and hepatitis B.

Even with some promising signs in early trials, the biggest biotechnology firm in the world faces long odds in finding a way to rid humanity of the diseases. And it’s unclear whether a cure for either virus would produce the kind of lucrative return that Gilead has earned from its treatments for hepatitis C.

See also: Highway bill gives $500 million to veterans’ hepatitis drugs

The Foster City, Calif.-based drugmaker has more than doubled its drug sales since 2013 after introducing Sovaldi and Harvoni, which cure more than 90 percent of patients with the liver virus in a matter of weeks. Gilead’s success also has left it with $8.61 billion in cash on hand, and the drumbeat is getting louder for the company to make a large acquisition to support continued growth.

The biotech giant’s executives say Gilead is trying to maintain its position on the front lines of battle against the viral illnesses, even as it branches out into new disease areas such as cardiovascular and respiratory conditions.

“Gilead is the leader in HIV, and fewer companies are working in HIV now,” said Andrew Cheng, executive vice present of clinical research and development operations.

The biotech company dominates the HIV market, estimating that about 80 percent of new patients starting therapy are prescribed a Gilead drug. GlaxoSmithKline PLC, AbbVie Inc. and Johnson & Johnson are competitors.

Gilead’s Viread, taken in combination with other drugs in four HIV therapies, will face generic competition in December 2017. To replace it, Gilead is rolling out a new set of treatments based on TAF, an improved version of Viread that achieves the same viral suppression with one-10th the dose, meaning fewer side effects to patients’ kidneys and bones. The TAF-based regimens are expected to start receiving approvals from U.S. regulators in November.

Hidden virus

At the same time, Gilead is working to put the TAF drugs out of business as it pursues a cure. HIV is notoriously tricky to attack — current treatments suppress virus replication, but the wily virus hides out in latent, or “resting,” cells that the immune system can’t find. With current drugs, when a patient stops treatment, the sleeping cells roar back to life.

See also: $10 copy of Gilead blockbuster Sovaldi appears in Bangladesh

Gilead’s leading candidate for a cure, GS-9620, employs a tactic known as “kick and kill,” in which latent cells are stimulated into an active mode, Cheng said. Then, in theory, the immune system can recognize the infected cells and kill them.

In a study of monkeys presented in February, doses of GS-9620 corresponded with “blips” of viral activity that suggested resting cells were being “woken up,” Cheng said. The drug is now being tried in humans in an early-stage trial, with initial results expected in the first half of 2016.

Woodchuck cure

GS-9620 is being considered as well as a component of a cure strategy for hepatitis B, a virus that also has evasive tactics that allow it to hide from the immune system. In a study of woodchucks — animals commonly used for hepatitis B studies –viral loads were undetectable after four weeks of treatment, giving them a “functional cure” that remained even when treatment was stopped.

In a chimpanzee study, a short course of therapy provided long-term viral suppression, encouraging Gilead to move into human trials.

There’s no guarantee the drug will end up working for either virus. And while cures could be lucrative, the markets for the diseases are different than for hepatitis C drugs Sovaldi and Harvoni, which generated $4.9 billion in second-quarter sales.

Smaller market?

“In the major markets, HIV is now a chronic condition versus the ruthless killer it was decades ago, thanks to many efficacious drugs available today that keep the virus at bay,” said Asthika Goonewardene, a Bloomberg Intelligence analyst. “The need for a ‘cure’ is less critical.”

While the hepatitis B population is larger than that of hepatitis C — about 350 million chronic patients worldwide versus 150 million, according to the World Health Organization — a greater proportion of hepatitis B patients are in the developing world, where profit margins would be smaller for Gilead, Goonewardene said.

On the other hand, the drugs could require a longer treatment time than Sovaldi and Harvoni, resulting in higher price tags for a course, UBS AG analyst Matt Roden said.

To continue the momentum Gilead has gotten from Sovaldi and Harvoni, the company will remain under pressure to do deals.

“They’re going to have to branch out a bit if they want something to add $2, $3 or $4 billion to the top line over the next few years,” said Phil Nadeau, an analyst at Cowen & Co. Nadeau suggested Gilead look at deals in cancer or lung diseases.

See also: ’97 AIDS Claims Under $1B

Gilead’s work on GS-9620 also may open the door to more acquisitions like the one that made the company the leader in hepatitis C, Roden said. Harvoni combines Gilead’s drug ledipasvir with Sovaldi, which was acquired in the 2012 purchase of Pharmasset Inc.

“The blueprint for Gilead’s M&A in the past has been to integrate assets in an area where they have expertise,” said Roden. “It’s the combination of assets that has the most value.”


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.