A Year-End Look At HIV Treatments in 2013

Follow @leokornsun

2013 was a year of encouraging developments in treatments for HIV, the virus that causes AIDS.

Although we still haven't found a cure for HIV, which affects approximately 34 million people worldwide and 1.1 million people in the United States, better drugs were approved in 2013, and a new generation of HIV vaccines is making its way through clinical trials.

Let's take a closer look at these major developments, and how companies like Gilead Sciences (GILD 0.55%), GlaxoSmithKline (GSK 1.35%), Pfizer (PFE 0.07%), and Inovio Pharmaceuticals (INO 5.69%) could get closer to their goals of effectively treating HIV in 2014.

Gilead continues dominating the market

HIV treatments have come a long way since the days of AZT, the first FDA approved treatment for the disease, which caused a wide array of blood, liver, and heart problems.

Over the past 12 years, Gilead Sciences' Viread has been the most important HIV drug in the market. Viread blocks reverse transcriptase, a virus enzyme which plays a crucial role in HIV and hepatitis B infections.

Over time, Gilead has improved Viread by combining it with other drugs, such as Truvada (Viread and Emtriva), Atripla (Viread, Emtriva, Merck's Sustiva), Complera (Viread, Emtriva, Tibotec's Edurant) and Stribild (Viread, Emtriva, EVG, and cobicistat).

However, Viread is the foundation on which Gilead's newer drugs are built upon, which could make it a liability when its patent expires in 2017. Last quarter, Gilead's HIV drugs generated $2.3 billion in sales, accounting for 85% of its top line.

2013 represented the first full year that Stribild, which was approved last September, was on the market. Sales of Stribild soared 722% year-over-year to $144 million, despite some criticism of its controversial wholesale price of $28,500 per patient per year. By comparison, Atripla was originally launched in 2006 at $13,800, but has since risen to Complera's wholesale price of $20,500.

ViiV's Tivicay is a potential blockbuster

Meanwhile, ViiV Healthcare, a company formed by GlaxoSmithKline and Pfizer in 2009 to focus on developing HIV treatments, gained FDA approval for its HIV drug Tivicay in August. The drug also received a positive opinion from the CHMP in Europe in November.

Tivicay is an integrase inhibitor -- a new class of HIV drugs which gained attention with the approval of Merck's Isentress in 2007. Both drugs inhibit a viral enzyme, known as integrase, which integrates retroviral DNA into a host cell's genome.

Tivicay was originally developed by Shionogi, which owns 10% of Viiv. Glaxo and Pfizer respectively own the remaining 76.5% and 13.5% of the company. Although Tivicay must be taken with two other generically available HIV drugs, Ziagen and Zeffix, the combined treatment is substantially cheaper than Gilead's newer drugs, with a wholesale price of $14,105 per year.

Tivicay's sales are expected to reach $900 million by 2017, with the potential to hit annual peak sales of $5 billion. Tivicay could help turn around ViiV's declining sales over the last few quarters, which was caused by generic competition for Combivir, Epivir, and other products in the U.S.

HIV vaccines show promise

A vaccine has been the elusive holy grail of HIV treatments. Back in 1984, U.S. Health and Human Services Secretary Margaret Heckler famously suggested that a vaccine for AIDS would be available within two years.

However, nearly three decades later, the closest that researchers have come to that goal is RV 144, an HIV vaccine which showed promising results in a clinical trial between 2003 and 2009 in Thailand.

The initial study of RV 144 showed that patients given the vaccine had a 31.2% lower rate of infection than those given a placebo. More specifically, 51 out of 8,197 volunteers given the vaccine contracted HIV, compared to 74 who were given the placebo. However, considering the size of the trial group, it's difficult to determine if the vaccine had any effect all.

According to the original study, there was only a 4% chance that the vaccine was not effective, but a 2011 study conducted at Duke University determined that there was actually a 29% chance that it was not effective. Nevertheless, RV 144 is still considered a suitable candidate for large scale research.

Inovio Pharmaceuticals' next-generation vaccines are also worth keeping an eye on. The company has an extremely promising pipeline full of vaccines for cancer, hepatitis B and C, malaria, and HIV.

Inovio's approach is special because it uses two new technologies -- electroporation, which delivers the vaccine through brief electric pulses, and synthetic DNA, which is designed to stimulate an immune system response. It is currently working on three HIV vaccines:

Source: Company website.

Although all three vaccines are still in early stage trials, Inovio's method of stimulating an immune system response via synthetic DNA could be a promising new approach to treating HIV. Most importantly, they are being tested as preventative and therapeutic vaccines, meaning that they could be used to treat both non-infected and infected patients.

The Foolish takeaway

Looking ahead into 2014, convenient combination treatments like Gilead's Stribild could substantially improve the daily lives of patients. In addition, newer integrase inhibitors like Isentress and Tivicay could chip away at the dominance of Viread-based drugs.

HIV vaccines, now nearly three decades overdue, could eventually arrive as well. RV 144 and Inovio's HIV vaccines are two promising projects which could eventually save millions of lives and render HIV cocktail drugs from Gilead and ViiV Healthcare obsolete.

Another top stock to keep an eye on