If you're an HIV patient, you know the drill. You take three pills a day, or a three-drug cocktail, every single day. The triple combo, which has been standard for HIV since the mid-1990s, has transformed HIV from a death sentence into a more manageable condition, but each of the three drugs creates its own series of side effects.
Problems include fatigue, nausea, headaches, and much more serious effects, such as kidney damage and liver failure. In fact, the inability to cope with side effects is the leading reason people change, or even end, their HIV regimen, even though those who go untreated will experience complications from the virus that, over time, are fatal.
Biotech Goliath Gilead Sciences (NASDAQ: GILD) has long dominated the market for HIV treatments, with global sales of roughly $9 billion last year. However, a new competitor is emerging that could be a game-changer for patients and investors alike.
A more powerful HIV drug with fewer side effects?
Big pharma GlaxoSmithKline (NYSE:GSK) believes it has a game-changing drug that could reduce side effects for HIV/AIDS patients by at least a third. The drug is called dolutegravir, brand name Tivicay, and it arrests HIV replication and rapidly reduces viral levels in the blood. Based on results from earlier clinical trials, it appears powerful enough to suppress HIV either on its own, or with the help of just one other drug.
Glaxo is scrambling to get the duo regimen on the market, with Tivicay in major late-stage trials. Assuming they succeed, Glaxo also believes the drug might work as a single-drug HIV treatment regimen that the virus doesn't become resistant to in time. The latter is important because of the ability of the virus that causes AIDS to mutate and become drug-resistant.
For HIV patients -- i.e. 35 million people globally, and another 2 million diagnosed every year -- a duo therapy would clearly be a big plus. For investors, with the HIV drug market running over $15 billion in annual sales, it's an opportunity worth looking at closely.
Tivicay is the point of the spear in the battle to unseat Gilead
Glaxo's chance of giving HIV market leader Gilead Sciences a run for its money may seem far-fetched, since Gilead owns 58% of the HIV market. But if the duo-drug treatment becomes the doctor-preferred strategy, Glaxo could grab a bigger slice of the market, and perhaps eventually overshadow Gilead, as doctors begin to prefer a new, simpler regimen with fewer side effects.
But first, Glaxo's game-changing drug needs success in two late-stage trials. In one, Tivicay is being tested alongside rilpivirine, a brand-name HIV drug made by Johnson & Johnson (NYSE:JNJ). In another large-scale trial, Tivicay is being combined with 3TC, a generic drug. A study led by Pedro Cahn, cited in The Wall Street Journal showed that Tivicay plus 3TC suppressed levels of HIV in 18 of 20 previously untreated patients.
Based on that, Glaxo struck a deal to provide Tivicay in Botswana, where nearly 25% of all adults are infected with HIV, as part of the government's "Treat All" program.
Gilead's defense may be too late
Gilead is developing a competing drug called bictegravir. Four pre-clinical and phase 1 studies released promising data this June. If bictegravir makes it through the gauntlet of further clinical trials and the FDA, it should launch in 2018.
But Glaxo may have an edge in several ways. First, there have been no reported cases of HIV that develops resistance to Tivicay in patients who are new to treatment. That makes it unique among integrase inhibitors, according to David Hardy, a spokesperson for the HIV Medicines Association.
Beyond that, Glaxo has the shorter timeline to launch. That means it will probably be well established by the time Gilead's competitor comes along.
Calling the winner between the arch-rivals
Honestly, as a Gilead investor, I'd like to call this battle in favor of Gilead, whose HIV dominance is so large you could be forgiven for thinking it unassailable.
More to the point, the big biotech isn't standing still. It's rapidly growing its arsenal. Two new HIV treatments, Genvoya and Odefsey, were approved this spring. The new TAF-based HIV regimens helped lift Gilead's quarterly HIV sales by almost 15% last quarter, compared with the same period a year ago.
On the other hand, Glaxo's stage 3 combo trials should start yielding results next year, and some analysts project that Tivicay, together with Glaxo's other prominent HIV drug, Triumeq, should reach sales of $7 billion by 2022. There are also projections that Triumeq, a one-pill triple combo that includes Tivicay, could get to $4 billion just on its own.
Forecasting sales is a tricky business. Trivicay is owned by ViiV, which is a joint venture of which Glaxo owns 85%. How ViiV commercializes Tivicay will be critical. If Tivicay becomes a bedrock drug for multiple new two-drug combinations, its growth rate could go well beyond projections. ViiV is also developing another long-acting integrase inhibitor called cabotegravir that also shows promise for use in HIV duo therapies. Finally, there's the chance that Tivicay could succeed as a monotherapy -- in which case, all bets are off.
Bottom line: A simpler, cheaper, more power treatment with fewer side effects offers a compelling edge in a massive market, and this is a battle you'll want to keep an eye on.
Cheryl Swanson owns shares of Johnson & Johnson and Gilead Sciences. The Motley Fool owns shares of and recommends Gilead Sciences and Johnson & Johnson. The Motley Fool has the following options: short October 2016 $85 calls on 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.