FDA Clears Gilead's Sovaldi - Analyst Blog


Gilead Sciences Inc. ( GILD ) received a boost when the U.S. Food and Drug Administration (FDA) approved its potential blockbuster drug Sovaldi (sofosbuvir: once daily) as a combination therapy for treating patients suffering from chronic hepatitis C virus (HCV),  the primary reason behind liver cancer and liver transplantation in the U.S. The approval of the all-oral HCV treatment does not surprise us as its approval was recommended by an advisory panel of the FDA in Oct 2013. The FDA was scheduled to render its decision by Dec 8 (target date). The U.S. regulatory body, however, cleared Sovaldi a couple of days ahead of the scheduled target date.

Gilead gained U.S. approval for Sovaldi on the basis of encouraging data from four phase III studies - NEUTRINO, FISSION, POSITRON and FUSION. Gilead had submitted the new drug application in April this year. Moreover, the FDA also considered data from two other phase III studies (VALENCE and PHOTON-1) after assigning Sovaldi the breakthrough designation status.

The approval of Sovaldi is a ig positive for HCV patients as it would not only bring down the duration of therapy to a minimum of 12 weeks but would also eliminate/reduce the duration of peg-IFN injections depending on the genotype of the disease. Currently, HCV therapy includes up to 48 weeks of treatment with a regimen inclusive of injectable peg-IFN. Moreover, the current standard of care comes with several side effects which make it difficult for patients to remain on treatment.

The FDA cleared the drug after reviewing the application on a priority basis as an all-oral therapy for treating patients affected with genotypes 1, 2, 3 or 4 of the virus. Specifically, the FDA approved Sovaldi combined with ribavirin for treating HCV patients with genotypes 2 or 3 of the virus, requiring 12 weeks and 24 weeks of treatment, respectively. The approval of the Sovaldi containing regimen marks the clearance of the first all oral treatment for treating chronic HCV patients with genotypes 2 or 3. Sovaldi in combination with ribavirin can also be used to treat chronic HCV patients awaiting liver transplantation to prevent the recurrence of the virus after transplant.

Furthermore, the U.S. regulatory body said that Sovaldi in combination with peg-IFN and ribavirin can be used to treat HCV patients with genotypes 1 and 4. However, the required treatment duration is as low as 12 weeks. Gilead stated in its press release that the wholesaler acquisition cost in the U.S. of a bottle of Sovaldi containing 28 tablets is $28,000.

The U.S. approval of sofosbuvir would not only boost Gilead's top line but also strengthen its position in the lucrative HCV market. Approximately 4 million people are estimated to be affected by chronic HCV in the U.S. alone. However, the treated population is much lower. This leaves the field open for new treatments.

The FDA approval for Sovaldi comes a few weeks after the clearance of Johnson & Johnson 's ( JNJ ) Olysio in combination with peg-IFN and ribavirin for treating chronic HCV patients. Moreover, companies such as Bristol-Myers Squibb Company ( BMY ) are developing therapies to combat HCV.

Gilead, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). A better-ranked stock in the biopharma space includes Actelion Ltd. ( ALIOF ) which carries a Zacks Rank #1 (Strong Buy).


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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ALIOF , BMY , GILD , JNJ



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