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Phase 3 + Phase 3 = Quad Approval

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Gilead Sciences' (Nasdaq: GILD  ) latest clinical trial results should be good enough -- in theory at least.

Data from the second phase 3 trial testing its HIV Quad pill looked just as good as the first. The drug proved non-inferior to a combination of Abbott Labs' (NYSE: ABT  ) Norvir, Bristol-Myers Squibb's (NYSE: BMY  ) Reyataz, and Gilead's Truvada. Previously, the Quad was shown to be non-inferior to Atripla, a single pill combination of Truvada and Bristol's Sustiva.

From a numerical standpoint, the Quad beat the other combination -- 90% of patients on the Quad had very low levels of HIV in their blood compared with 87% on the other regimen -- but the 3-percentage-point difference is meaningless from a statistical standpoint. With the sample size Gilead used, there's a 95% chance that the Quad was somewhere between 1.9 percentage points worse and 7.8 percentage points better.

Considering that Gilead owns all four components of the Quad pill, being as good as the current standards would seem to be good enough. With better margins on the Quad, stealing market share from Atripla should increase the bottom line. And if Gilead can take market share from Reyataz and Norvir or other regimens sold by Pfizer (NYSE: PFE  ) and GlaxoSmithKline's (NYSE: GSK  ) ViiV Healthcare and others, all the better.

Being the same as the current treatment means doctors have no reason to not prescribe the Quad, but it also means they don't really have any good reason to prescribe it, either. Doctors are comfortable with Atripla -- it's been on the market for five years -- which may make it hard to unseat.

The best hope for Gilead is that the safety profile of the Quad gives it an edge. If the number of people dropping out of the trial because of adverse events is any indication -- 3.1% for the Quad and 5.1% for the other regimen -- Gilead might have some selling points, but investors will have to wait until the full data are presented at a scientific meeting next year to know for sure.

Investors won't have to wait too long to get the battle of the HIV combo drugs under way. Gilead plans to submit its marketing application to the Food and Drug Administration by the end of the year. Assuming the agency gives the drug an accelerated approval, the Quad could be on the market by the middle of next year.

Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of GlaxoSmithKline and Abbott Laboratories. Motley Fool newsletter services have recommended buying shares of GlaxoSmithKline, Gilead Sciences, Abbott Laboratories, and Pfizer. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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