Encysive Pharmaceuticals (ENCY)

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Gilead May Gain the Advantage on Its Foes

By Adam Feuerstein
Senior Writer
5/22/2007 11:07 AM EDT
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Gilead Sciences' (GILD - Cramer's Take - Stockpickr - Rating) chief scientific officer said Monday that the U.S. Food and Drug Administration might not require regular liver safety monitoring for patients taking ambrisentan, the company's experimental drug for the treatment of pulmonary arterial hypertension, or PAH.

The absence of a so-called "black box label" for ambrisentan would be a huge marketing advantage for Gilead over its competitors, most notably Swiss drugmaker Actelion and U.S. biotech firm Encysive Pharmaceuticals (ENCY - Cramer's Take - Stockpickr - Rating).
The FDA is expected to issue its approval decision for ambrisentan on or before June 18. In an interview Monday, Gilead's Chief Scientific Officer Norbert Bischofberger said the company and regulators are currently negotiating over the language in the ambrisentan label.

Asked if he believed the FDA will require liver monitoring in the ambrisentan label, Bischofberger said, "I don't think it should be in there."

While Bischofberger was careful to say that the FDA would make the final call and that labeling discussions are not complete, he noted his belief that safety data collected and presented to regulators to date clearly show that ambrisentan doesn't cause liver toxicity, and in fact, the drug probably ameliorates the problem in patients with pulmonary arterial hypertension.

"This is the most important data point for clinicians that differentiates our drug [ambrisentan] from the others," said Bischofberger.


How Competitors Stack Up
At present, the approved FDA label for Actelion's Tracleer is topped by a strong warning about the drug's potential to cause serious liver damage. For that reason, Tracleer patients are required to undergo monthly monitoring for liver toxicity. Actelion reported 2006 worldwide Tracleer sales of $730 million in 2006. First-quarter sales topped $210 million, putting the drug on an $800 million sales run rate for the current year.

Encysive's Thelin has shown fewer propensities for liver toxicity, but the risk is still great enough that a warning against liver damage is widely expected in the drug's label. The FDA is expected to issue an approval decision on Thelin by June 15 at the latest.

Data from Gilead's ambrisentan have shown the drug to have essentially no negative effect on liver function. If Gilead can introduce ambrisentan into the PAH market with comparable efficacy and a markedly better safety profile, it should be able to capture a large segment of Tracleer's sales.

But to date, most analysts who cover Gilead still expect the FDA to include language about the potential for liver damage in the ambrisentan label, mainly because the toxicity is thought to be an effect for the entire class of drugs known as endothelin receptor antagonists. The overall market for these drugs is expected to expand to about $1 billion annually, with the introduction of ambrisentan and Thelin.

So far, ambrisentan appears to have the advantage when it comes to liver safety. Long-term follow-up data from 383 PAH patients enrolled in two phase III ambrisentan studies were presented Monday at the annual meeting of the American Thoracic Society.

After a mean exposure to the drug of 1.4 years, just 2.1% of ambrisentan patients developed elevated liver enzymes greater than three times the upper limit of normal. This is the standard measurement for potential liver damage. Only one ambrisentan patient in the long-term follow-up study had to stop taking the drug because of elevated liver enzymes.

By comparison, 2.3% of PAH patients on placebo during the 12 weeks of the phase III ambrisentan studies reported elevated liver enzymes greater than three times the upper limit of normal.

Actelion's Tracleer has a reported elevated liver enzyme rate of about 14%, with about 9% of patients forced to stop taking the drug because of liver toxicity. For Encysive's Thelin, about 6% of patients report elevated liver enzymes, which forces about half that many to discontinue the drug.

In a separate data presentation Monday at the American Thoracic Society, researchers reported that patients who stop taking Tracleer or Thelin because of liver toxicity can be switched to ambrisentan successfully and without any further incidence of liver damage.


Treatment Options
Pulmonary arterial hypertension is a chronic disease caused by constriction of the blood vessels that bring blood from the heart to the lungs. The resulting high blood pressure in these vessels leads to shortness of breath and heart damage. Ultimately, PAH patients die of heart failure. The disease affects about 200,000 patients worldwide.

PAH is treated with various classes of drugs, depending on the severity of the disease. A relatively new trend in PAH treatment is the use of combinations of drugs for greater efficacy.

Once ambrisentan is approved, Bischofberger said, Gilead will move aggressively to develop various combination therapies. Essentially, the company wants to develop a clinical strategy for PAH that mimics the strategy it used to become a powerhouse in the HIV market, he said.

One of the first steps in that direction will likely be work to combine ambrisentan with tadalafil, a PAH drug being developed by Eli Lilly (LLY - Cramer's Take - Stockpickr - Rating). Tadalafil is the active ingredient in the erectile dysfunction drug Cialis. Lilly is seeking to enter the PAH market in exactly the same way that Pfizer (PFE - Cramer's Take - Stockpickr - Rating) did recently with Revatio, a reformulation of its erectile dysfunction drug Viagra.

Tadalafil and ambrisentan are both dosed once a day, so the potential is there for Gilead and Lilly to partner on a fixed-dose, single-pill combination treatment for PAH. This is something that Actelion and Pfizer cannot do because Tracleer is dosed twice per day, while Revatio is dosed three times per day.

"The hardest part will be putting together the business agreement," between Gilead and Lilly, said Bischofberger. "From a clinical perspective, a combination of ambrisentan and tadalafil is fairly straightforward."

Before that happens, Bischofberger believes that ambrisentan will be able to replace Tracleer in patients who are now taking a combination of Tracleer and Revatio. Bischofberger believes doctors will be inclined to make this switch because Tracleer decreases the efficacy of Revatio, while ambrisentan does not.

Gilead shares closed Monday down 32 cents to $82.70.
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