Approval Likely, but Details Still Important

Gilead Sciences (Nasdaq: GILD  ) has already submitted its marketing application for its HIV quad pill to regulatory authorities, and the biotech has said the drug worked in two different trials.

But the devil is in the details, especially since Gilead is only trying to prove that the quad is non-inferior to Atripla -- a three-in-one pill -- or to a combination of Abbott Labs' (NYSE: ABT  ) Norvir, Bristol-Myers Squibb's (NYSE: BMY  ) Reyataz, and Gilead's Truvada.

Investors got their details this week when the data was presented at the Conference on Retroviruses and Opportunistic Infections. Safety data is most important, since the quad works just as well as -- but not markedly better than -- the other combinations.

The trial comparing the quad to Atripla is the more important of the two, since Atripla is currently the most-prescribed HIV treatment regimen in the United States. Gilead has a financial incentive to sell the quad over Atrtipla, since it has to share profits of Atripla with Bristol-Myers but owns all four components of the quad.

The quad produced lower levels of abnormal dreams, insomnia, dizziness, and rash, but caused more low-grade nausea. It looks like the quad might have won the safety battle, but the adverse events are all fairly minor issues and might not be enough to convince doctors to switch patients. The quad also induced smaller increases in cholesterol levels compared to Atripla, which might give it an edge in patients who are already struggling with high cholesterol levels.

With an approval looking pretty likely, the upcoming advisory committee will be an interesting event for investors to pay attention to. Rather than the advisory committee being a typical binary event with hints of whether the FDA will approve the drug, investors might instead learn how likely it is that key opinion leaders will prescribe the drug. In addition to competing with Atripla and the Norvir-Reyataz-Truvada combination, investors should listen for comments comparing the quad to Merck (NYSE: MRK  ) Isentress, which is an integrase inhibitor as in one of the components of the quad. Even without substantial head-to-head data, some of Isentress' market might be the easiest low-hanging fruit to steal, since the quad comes in a convenient all-in-one once-daily pill.

While you're waiting to see how the quad will compete, take a look at what Fool analysts believe is the next rule-breaking multibagger. Get the free report by clicking here.

Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Abbott Laboratories and Gilead Sciences. 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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