Oh, the irony. Gilead Sciences (Nasdaq: GILD) is applying for Food and Drug Administration approval for a drug that could, theoretically, kill the sales of its cash-cow drug franchise.

Why would the biotech do such a thing? Gilead would probably tell you it's the right thing to do -- and it is -- but I suspect the finances also work out in Gilead's favor as well.

Gilead asked the FDA to approve its HIV treatment Truvada as a prophylaxis to prevent infection by the virus. Of course, if patients aren't being infected, they won't need Truvada or any of Gilead's other HIV treatments.

But there are a lot more people at risk of being infected than there are people who are actually infected; so, in theory, the market is larger for a prophylaxis and should temper the loss of any sales because of people never becoming infected in the first place.

I'm not sure other HIV drugmakers -- Pfizer (NYSE: PFE), GlaxoSmithKline (NYSE: GSK), Bristol-Myers Squibb (NYSE: BMY), and Johnson & Johnson (NYSE: JNJ) -- need to be worried just yet, though. Even if Truvada is approved, there will still be a lot of high-risk people not taking the drug.

And it's not clear whether the FDA will even approve Truvada as a prophylaxis. As with any drug, the FDA will balance efficacy with safety, and while Truvada seems fairly safe, there's some evidence that it might damage kidneys, especially when used for extended periods of time. On the efficacy side, it's better than placebo, but not as good as just avoiding risky behavior such as sharing needles, unprotected sex, etc. -- that can lead to infection.

Also, Truvada doesn't prevent 100% of the infections, but some high-risk patients might increase their risky behavior because they think they're covered. Obviously, if used correctly, Truvada would add a layer of protection, but the FDA might consider real-life situations when deciding about an approval.

The FDA gave Truvada an accelerated review, so the agency at least thinks it's a worthy idea, but that's by no means a guarantee of an approval. The FDA will hold an advisory panel in May to review the drug, so we'll get a better idea then of how the agency will balance the drug's potential risks and benefits.

Gilead seems to be in a win-win. There's probably more upside to approval, but the status quo -- Truvada as "just" a multi-billion-dollar antiviral treatment -- has worked out pretty well so far.

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