Recently, Gilead Sciences, Inc. (GILD) announced that it has filed a marketing application seeking approval for its HIV candidate, cobicistat, in the US.
Cobicistat acts as a “boosting” agent whose addition causes blood levels of protease inhibitors — such as Bristol-Myers Squibb’s (BMY) HIV drug Reyataz and Johnson & Johnson’s (JNJ) Prezista — to increase, thereby enabling the HIV therapy to be dosed once daily.
The new drug application (NDA) included data from a phase III study (114) which showed that cobicistat was non-inferior to Abbott Laboratories’ (ABT) HIV therapy Norvir over 48 weeks. The application also included pharmacokinetic data which revealed that the addition of cobicistat boosted the exposure of HIV therapies Reyataz and Prezista similar to Norvir. We note that Gilead is also seeking approval of cobicistat in the EU.
Gilead has partnerships with Janssen R&D Ireland (a unit of Johnson & Johnson) and Bristol-Myers for developing cobicistat as a fixed-dose combination therapy. While the deal with Johnson & Johnson pertains to the development of cobicistat with Prezista, the deal with Bristol-Myers pertains to the development of cobicistat in combination with Reyataz.
Moreover, cobicistat is one of the components of Gilead’s potential blockbuster HIV combination pill Quad. The other components of the pill are elvitegravir and Truvada. Gilead is looking to get the Quad pill (once daily) approved as a first-line therapy for treating adults infected with the HIV virus.
The pill is under review in the US with a final decision expected by August 27, 2012. Positive news from the FDA in August would further boost the top line at Gilead and strengthen its already established HIV portfolio. The Quad pill is also under review in the EU, Australia and Canada.
Our Recommendation
We have a Neutral recommendation on Gilead. Our long-term stance is in line with the Zacks #3 Rank (Hold rating) carried by the company in the short run.
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