Gilead Races Against Competitors for an Oral Hepatitis-C Cure

The search for a hepatitis-C cure is one of the most active areas within biotechnology research and development.

One of the company's ushering in the next generation of hepatitis-C treatment is Gilead Pharmaceuticals (NASDAQ: GILD  ) . The company acquired hepatitis-C drug sofosbuvir in its $11.2 billion acquisition of Pharmasset back in January 2012.

Sofosbuvir has a very good chance of beating rival drugs to the market. Those competing drugs are being developed by Vertex Pharmaceuticals (NASDAQ: VRTX  ) , Merck (NYSE: MRK  ) and AbbVie (NYSE: ABBV  ) , the drug manufacturing giant that split off from Abbott Labs last winter.

Gilead's hopes for first-to-market approval
In April, Gilead reported strong phase 3 trial data. Those positive results for sofosbuvir as a combination therapy with ribavirin for genotype 2 and 3 hepatitis-C patients prompted Gilead to file for approval from the Food and Drug Administration. The filing also seeks approval for sofosbuvir combined with ribavirin and interferon for genotype 1 -- the most common variant of the disease. The FDA granted Gilead's application priority review in June.

However, the holy grail of hepatitis-C treatment is an interferon-free oral treatment alternative.

Developing such a solution will likely grab significant share in the $20 billion hepatitis-C treatment market because interferon comes with significant side effects and current non-oral treatments require injections, which many patients dread.

As a result of the opportunity, Gilead is studying 12- and 24-week dosing of oral sofosbuvir without interferon through its Ion 1 and Ion 2  trials.

If those trials work as hoped, doctors will likely make it a first line treatment, shifting use of current treatments from Vertex and Merck to second tier status. Vertex's Incivek -- the fastest drug to reach $1 billion in sales after launching in May 2011 -- and Merck's Victrelis combined to generate $330 million in sales last quarter.

But that underestimates the true potential for an oral hepatitis-C treatment as many doctors are delaying treatment in hope of these new options. This suggests the first to market will see significant ramp in sales tied to pent-up demand.

Gilead's competitors aren't giving up
That's not to say that Vertex and Merck are giving up on the market. Both are committing significant resources developing their own interferon-free choices.

Vertex hopes to follow up its highly successful Incivek with another all-oral option. However, the company's VX-135 faced headwinds in late July when the FDA put a partial hold on a mid-stage trial of the drug due to toxicity concerns tied to the highest 400 mg dose. The trial is continuing for the lower 100 mg dose.

At Merck, the company announced its MK-5172 saw a 92% cure rate six months after completing a 12 week treatment course. MK-5172 was dosed alongside ribavirin in the trial.

But, the competitor closest to threatening Gilead in the race to launch is AbbVie. During an investment conference in July, the company suggested it could have the first oral drug approval. It is in the final stages of its phase 3 trials. If approved, AbbVie's drug would help the company diversify its sales away from megablockbuster Humira, which accounted for $2.6 billion in Abbvie sales last quarter, roughly 55% of the company's total revenue.

But Gilead seems to remain the front runner
Its sofosbuvir treatment would require just one daily pill versus four for AbbVie's drug. And sofosbuvir showed a 95% cure rate in phase 2 trials, similar to AbbVie's cure rate following 12 weeks of treatment. This suggests that even if AbbVie does get to market first, doctors and patients will likely favor Gilead's drug.

That could mean a big pay day for the company given there are roughly 180 million people infected with hepatitis C worldwide. While drug development is notoriously difficult and setbacks do occur, it appears Gilead and AbbVie should be watched closely as either could see substantial revenue growth if granted approval, making them Foolishly attractive.

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Read/Post Comments (4) | Recommend This Article (6)

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.

  • Report this Comment On August 27, 2013, at 8:39 PM, HepCenMod wrote:

    I fully agree. Recently completed an 8week arm of Gilead's ION3 trial - a Phase III trial of their new 'combo pill' I am Undetected for the virus.

    I'm posting this to point out that the drug is spelled, 'Sofosbuvir' . . not, 'Sonosbuvir' . . and it is a combination of that drug WITH another that is currently called, 'Ledispavir' . .

    This drug seems to be working well across all genotypes, in a very short time, with virtually no side-effects.

    Some of us have waited a VERY long time for this miracle, and I'm thrilled to have lived long enough to see it. Thank you.

  • Report this Comment On August 28, 2013, at 8:28 AM, cabostacos wrote:

    Article didn't even mention Giliead's chief competitor, ABBV. Just completed their 24 week arm for cirrhotics in June, I am still UND.

    ABBV should be cleared in the spring according to what my clinical trial coordinator thinks...

  • Report this Comment On August 28, 2013, at 7:19 PM, TMFEBCapital wrote:

    HepCenMod,

    Thank you for reading. It's great to hear of your success in the 8 week arm. It probably is not shocking so many doctor's and patients eagerly await this next generation of treatment given your experience.

    Thank you for also correcting the spelling on the drug Sofosbuvir. I have asked the MF editor to make the correction.

    Sincerely,

    Todd

  • Report this Comment On August 29, 2013, at 1:43 PM, boczernyk wrote:

    AbbVie hepC drug combo Ph3 dosing is complete for most part w its 6-cohort 3000+ enrollment. The pill regimen for an HCV patient is irrelevant when ~ 100% SVRs are being scored by naives & nulls. AASLD mtg in Nov will announce ABBV's- GILD-equal or better SVR from P3 trials.

    Our author might consider a detailed, well-researched piece on AbbVie, to alert his readers of the existence of ABBV, truly undervalued growth stock @ $43, whose ABBV symbol let alone story is a mystery to most. Likely that ABBV at 13 P/E w ~4% div expands 30%+ on Nov hepC news where GILD, a good biotech, is fully-priced at $58.

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