After getting killed over the last few days, investors should get some good news tomorrow. Gilead Sciences (Nasdaq: GILD) is up for FDA approval of its combination of Truvada and Johnson & Johnson's (NYSE: JNJ) Edurant.
No FDA approval is guaranteed, but this one is about as close as it gets. Truvada has been approved since 2004; Edurant was approved in May. There's no obvious reason I see that the FDA won't approve the combo product.
Truvada-Edurant will only be the second triple-drug combo -- Truvada is two drugs -- on the market. HIV patients love the convenience compared to taking multiple HIV drugs from Abbott Labs (NYSE: ABT), GlaxoSmithKline (NYSE: GSK), Pfizer (NYSE: PFE), and others. Last year, Gilead sold nearly $3 billion worth of Atripla, the other triple-drug combo, in its fourth full year on the market.
The only question now is what the drug will be called. Investors have been affectionately calling it Btripla, but BetterEconomicsTripla would be a better description. The margins on the new drug should be higher than they are for Atripla, since Johnson & Johnson is taking a smaller cut than Bristol-Myers Squibb (NYSE: BMY), Gilead's partner for Atripla.
Don't kid yourself into thinking that Gilead will suddenly be able to convert all the Atripla users into Truvada-Edurant users, though. Doctors will stick with what they know works. The best hope for the new drug is to make inroads in women of child-bearing age, since Atripla may cause birth defects. Once doctors see it working in that population, they might start using it more.
But first, we need that FDA approval tomorrow. Think we'll get it? Take our Foolish poll below and sound off with your reasoning and potential brand names in the comment box.
