The Small Change That's a Big Deal

Gilead Sciences' (Nasdaq: GILD  ) tenofovir alafenamide fumarate isn't all that different than the company's HIV drug Viread, which goes by the generic name tenofovir disoproxil fumarate.

Most of the time, these me-too drugs never reach the potential of their parent molecules. Pfizer's (NYSE: PFE  ) Pristiq hasn't lived up to the potential suggested by Effexor, the blockbuster molecule it's based on. Ditto for Johnson & Johnson's (NYSE: JNJ  ) Invega, which was supposed to replace Risperdal.

While there was nothing really special about those me-too drugs compared to their now-generic counterparts, Gilead is hoping the small chemical change can have a big enough effect to get doctors to switch to the new drug as Viread faces generic competition in a few years.

The anti-viral specialist doesn't need the new drug, henceforth referred to as TAF, to produce better efficacy than Viread; it just needs a cleaner side-effect profile. Viread has been linked to new onset or worsening of renal impairment and decreased bone mineral density.

In a small phase 2 trial, Gilead tested its new quad pill, Stribild -- which contains Viread -- to TAF plus the three other components of Stribild. The TAF-based regimen caused a smaller reduction in bone mineral density than Viread. The new regimen also had better creatinine clearance, a measure of renal function, compared to Stribild. Efficacy was comparable across the treatment arms.

Swapping out Viread as a component of Stribild might help increase sales down the road, assuming the phase 3 trial keeps the same safety trend. More importantly, Gilead hopes that doctors will swap Viread out of cross-brand cocktails that also contain drugs from Pfizer, Merck (NYSE: MRK  ) , Abbott Labs (NYSE: ABT  ) , and others. Gilead would like to continue to get a piece of those patients even after Viread sees generic competition.

Gilead is also testing another four-drug combination pill containing TAF, Johnson & Johnson's Prezista, and two other drugs owned by Gilead. Reducing pill burden with an all-in-one pill is the future of HIV treatment, and lower side effects that TAF produces should make it easier to compete.

While Gilead rules the HIV space, these three companies are setting themselves up to dominate retail. Find out what they are and why Fool analysts like them so much in the new free report, "3 Companies Ready to Rule Retail." Get your copy for free by clicking here now.

Fool contributor Brian Orelli has no positions in the stocks mentioned above. The Motley Fool owns shares of Gilead and Johnson & Johnson. Motley Fool newsletter services recommend Gilead and Johnson & Johnson. 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.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2086715, ~/Articles/ArticleHandler.aspx, 12/18/2014 9:17:17 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement