Good News for Gilead - Analyst Blog

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Gilead Sciences ( GILD ) received some encouraging news recently when an advisory panel of the U.S. Food and Drug Administration (FDA) recommended the approval of the company's HIV combination pill Quad. A final decision from the FDA regarding the matter is expected by August 27, 2012 (target date).

We note that the Quad pill is a combination of elvitegravir, cobicistat and Truvada. Gilead is looking to get the pill (once daily) approved as a first-line therapy for treating adults infected with the HIV virus.

The FDA's advisory panel met to review the new drug application (NDA) submitted by Gilead in October 2011 for getting Quad approved in the U.S. The NDA included positive data from two late-stage studies - 102 which compared Quad to Atripla and 103 which compared Quad to Norvir (ritonavir)-boosted Reyataz plus Truvada. While Norvir is marketed by Abbott Labs ( ABT ), Reyataz is marketed by Bristol-Myers Squibb ( BMY ).

While reviewing the application, the panel voted overwhelmingly (13-1) in favor of clearing the combination pill (a single tablet regimen) in the U.S. Even though the U.S. agency is not bound to follow the advice of its advisory committee, the recommendation of the panel is usually considered by the agency while deciding the fate of a candidate.

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 E.U, Australia and Canada. Approval in additional territories would increase the drug's sales potential.

Neutral on Gilead

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. We remain optimistic on the growth prospects of Gilead's HIV drugs, Truvada and Atripla. We are also encouraged by the approval of Complera/Eviplera, which together with Quad, once approved, will further fortify the HIV franchise and help mitigate the impact of the upcoming patent expirations.

Gilead is looking to combat the threat of genericization by inking deals and making acquisitions and introducing new products. To further strengthen its hepatitis C virus (HCV) portfolio, Gilead purchased Pharmasset in January 2012, for approximately $11.1 billion.


 
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This article appears in: Investing , Business , Stocks

Referenced Stocks: ABT , BMY , GILD

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