Gilead Single Tablet Regiment for HIV Good in Phase III

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Gilead Sciences, Inc. GILD announced positive results on four phase III studies evaluating bictegravir in combination with FTC/TAF as a single tablet regimen for HIV infection.

The four phase III studies evaluating a fixed-dose combination of bictegravir (50mg) (BIC), an experimental integrase strand transfer inhibitor (INSTI), and emtricitabine/tenofovir alafenamide (200/25mg) (FTC/TAF) for the treatment of HIV-1 infection met their primary objectives of non-inferiority.

We note that three of the ongoing studies are designed to explore the efficacy and safety of BIC/FTC/TAF compared with regimens containing GlaxoSmithKline’s GSK Tivicay dolutegravir (50mg) (DTG) among treatment-naïve patients and virologically suppressed patients switching from an existing antiretroviral regimen.

The fourth study is being conducted among virologically suppressed patients and compares switching to BIC/FTC/TAF versus on a suppressive regimen of two nucleoside/nucleotide reverse transcriptase inhibitors and a boosted protease inhibitor.

Based on the study, Gilead plans to submit data from the studies for presentations at scientific conferences in 2017. The company also plans to submit regulatory applications in the U.S. and EU in 2017.

Gilead is a dominant player in the HIV market, with an impressive portfolio. The company was the first to bring to market a single-tablet regimen (STR) for the treatment of HIV – Atripla. Gilead is looking to change the HIV market with improved long-term safety profiles.

The newly launched TAF-based products Genvoya, Odefsey and Descovy are performing well, with strong adoption in both the U.S. and EU. Genvoya has already become the most-prescribed regimen for both treatment-naïve and switch patients since its launch in Nov 2015.

Also, Genvoya has been listed as a preferred regimen in several HIV treatment guidelines. The TAF-based regimens now represent 42% of total Gilead HIV prescription volume following the launch of Genvoya, Odefsey and Descovy in 2016. Genvoya is now the company’s best-selling HIV product, surpassing both Truvada and Atripla since fourth-quarter 2016.

The uptake in HIV franchise should help the company combat the persistent decline in HCV franchise due to competitive pressure. Competition as well as pricing pressure has intensified further with the launch of Merck’s MRK Zepatier.

However, Gilead’s HIV products are not only facing generic threats but also steep competition primarily from Tivicay and Triumeq. Meanwhile, Gilead will lose exclusivity for Viread in 2017 in some countries outside the U.S. which should impact sales.

Shares of Gilead underperformed the Zacks classified Medical-Biomedical and Genetics industry in the last year with the stock losing 25.5% during this period, compared with the industry’s decline of 13.8%.

Zacks Rank & Key Pick

Gilead currently carries a Zacks Rank #3 (Hold).

A top ranked stock in the healthcare sector worth considering is VIVUS, Inc. VVUS which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

VIVUS’ loss per share estimates narrowed from 50 cents to 39 cents for 2017 over the last 30 days. The company posted positive earnings surprises in each of the trailing four quarters, with an average beat of 233.69%.

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