Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Gilead Sciences (NASDAQ:GILD) and Achillion Pharmaceuticals (NASDAQ:ACHN) headed in vastly different directions on Monday -- Gilead rose almost 14% and Achillion fell close to 13% -- following the release of hepatitis C clinical data from each company.
So what: For Gilead, which has been sailing through clinical trials, it was business as usual. The company combined GS-7977, which it acquired when it purchased Pharmasset last year, with GS-5885 and an antiviral ribavirin and administered it to 25 patients over 12 weeks. All patients in the study had undetectable levels of the virus four weeks after the study was completed. For Achillion, its pipeline update wasn't nearly as exciting. Achillion today provided more proof-of-concept data for its early stage protease inhibitor, ACH-2684, and noted that it plans to submit its mid-stage study protocol to the Food and Drug Administration for ACH-3102.
Now what: What today's data and news really signifies is that Gilead's potential blockbuster is running away from the field and leaving everyone else in its dust. Achillion's data isn't necessarily bad, but it speaks to how far behind the curve its pipeline is with regard to reaching FDA approval relative to Gilead's GS-7977. Idenix Pharmaceuticals (NASDAQ: IDIX) also had a nice pop today despite Gilead's news, as it reported that its evaluation of its leading hepatitis C candidate IDX-184 demonstrated, "no evidence of severe cardiac findings." Still, Idenix is in the same boat as Achillion, plus it has a clinical hold currently placed on IDX-184 by the FDA.
The real losers here appear to be Vertex Pharmaceuticals' (NASDAQ:VRTX) Incivek and Merck's (NYSE:MRK) Victrelis, which may see their day in the sun coming to an end. Analysts have been shaving estimates on these two interferon-based drugs recently with the anticipation that GS-7977 will storm the market within the next year.