Replies to post #116857 on Biotech Values

[DewDiligence]

GILD, which is rolling in dough, wants to raise even more:

http://finance.yahoo.com/news/Gilead-to-Offer-Senior-bw-3870819233.html?x=0&.v=1

Either they are raising because interest rates are insanely low… or they are raising because they have a substantial acquisition in mind.

[DewDiligence]

Elvitegravir met the NI threshold with plenty of room to spare:

http://finance.yahoo.com/news/Phase-III-Clinical-Trial-of-bw-708388788.html?x=0&.v=1

The primary endpoint analysis indicated that 59.0 percent of patients in the elvitegravir arm compared to 57.8 percent in the raltegravir arm (95% CI for the difference: -6.0% to +8.2%) achieved and maintained a viral load of less than 50 copies/mL through week 48. The predefined criterion for non-inferiority was a lower bound of a two sided 95% CI of -10%.

By prior agreement with the FDA, this is the only phase-3 study GILD needs to obtain approval for Elvitegravir—provided, of course, that there are no safety problems.

[DewDiligence]

The New Battle Lines in HIV

[Updated for phase-3 results of Elvitegravir in ‘non-Quad’ mode.]


Background: GILD’s Truvada franchise is so firmly established as the backbone of therapy in the early lines of treatment (where the overwhelming majority of HIV drug sales occur), that it will be hard for a regimen not based on Truvada to capture a significant portion of this market (#msg-26915314). New HIV drugs have essentially two ways to become successful: a) by being the third drug in a Truvada-based cocktail—i.e. a replacement for Sustiva; or b) by being a component of a nuke-sparing regimen that dispenses with Truvada and includes two or three drugs from other classes.

Of the two avenues to commercial success described above, programs using new Truvada-based regimens are much further advanced than those using nuke-sparing regimens, and hence Truvada-based regimens are the focus of the rest of this post. (See #msg-49282477, #msg-48915175, and #msg-52406597 for additional reading on nuke-sparing regimens.)

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Atripla and Truvada are dosed once daily, which has made qD dosing a standard for convenience (and compliance) that a twice-daily HIV regimen cannot hope to match. Thus, from a business standpoint, the question is to ask is: Which qD drugs will be able to supersede Sustiva as the third drug in Truvada-based regimens?

Inasmuch as Truvada consists of two nucleoside reverse-transcriptase inhibitors—Viread and Emtriva—the third drug in a Truvada-based cocktail will clearly come from a different class. The main options are non-nucleoside reverse-transcriptase inhibitors (NNRTI’s), protease inhibitors (PI’s) and integrase inhibitors (II’s).

However, the HIV market has been gradually moving away from the use of PI’s in early lines of therapy. Whether this is because of side effects, drug resistance, or interactions with non-HIV drugs is debatable, but the sales numbers are clear enough: BMY’s Reyataz and ABT’s Kaletra, the two biggest-selling PI’s, have been steadily losing market share even as they continue to grow slightly in dollar sales.

NNRTI’s and II’s that can be dosed qD are where the action is likely to be. The leading candidates to gain traction (IMHO) are as follows.


1. TMC278/Btripla. TMC278 is a qD NNRTI from JNJ that is similar to JNJ’s Intelence with better pharmacokinetics. (Intelence is dosed BID; both drugs have to be taken with food.) JNJ completed two phase-3 studies in which TMC278 was found to be non-inferior to Sustiva (#msg-52718327). Although these studies were nominally successful insofar as the primary non-inferiority endpoint was met, a possible Achilles heel was exposed in that TMC278 had almost twice as large a rate of virologic failure as Sustiva at 48 weeks (#msg-52471333, #msg-52480598).

What makes TMC278 especially noteworthy is that JNJ and GILD inked a 2009 collaboration to combine TMC278 and Truvada into a single qD pill that is commonly referred to as ‘Btripla’ (#msg-39660789). Although GILD has an economic incentive to develop an all-in-one pill consisting entirely of GILD’s own drugs (see paragraph #2 below), Btripla already has a submitted NDA and thus has a chance to reach the market much sooner than Quad or any other competitive option discussed in this post.

Until the disclosure of TMC278’s high rate of virologic failure, I had considered Btripla the clear frontrunner in the ranking in this post by dint of its timing lead. Now, I still consider Btripla the frontrunner among the options in this post, but the ranking is no longer clear-cut. Additional skepticism is warranted based on the disclosure on GILD’s 3Q100 that GILD feels the need to run two post-marketing studies to refine the addressable market for Btripla (#msg-55725398, #msg-55756102).


2. Quad/Elvitegravir from GILD. Elvitegravir is an II similar to MRK’s Isentress, which is doing about $500M in annualized sales; however, Elvitegravir has the crucial advantage of being dosed qD with help from a PK-boosting agent.*

Quad is the name for the 4-drug combo that includes Elvitegravir, the two drugs in Truvada, and GILD’s proprietary PK-booster called Cobicistat (f/k/a GS9350). Quad started phase-3 in Apr 2010 (#msg-48883214); in phase-2, Quad was non-inferior to Atripla at 24 weeks (#msg-45203412, #msg-46731576) and at 48 weeks (#msg-54357061). Elvitegravir without Cobicistat showed statsig non-inferiority to Isentress in a phase-3 trial where each integrase inhibitor was added to a ritonavir-boosted PI and a third agent (#msg-61291485). By prior agreement with the FDA, this is the only phase-3 study GILD needs to obtain approval for Elvitegravir—provided, of course, that there are no safety problems.

Clearly, GILD has an economic incentive to prefer Quad to the TMC-278 + Truvada combination GILD is developing jointly with JNJ; however, I rank Quad second in this post because the TMC-278 + Truvada combination has a chance to reach the market considerably sooner than Quad.


3. S/GSK1349572 (‘572), a qD integrase inhibitor from GSK that does not require PK boosting. Two phase-3 non-inferiority trials are testing ‘572 against Isentress, one in treatment-naïve patients and one in integrase-naïve patients, which is effectively the second-line setting (#msg-55878096).


4. Lifecycle management programs to extend patent protection on Truvada/Atripla beyond 2017 (#msg-34894135). Chimerix has embarked on such a program (#msg-50161857) and there are probably others.


*Isentress failed in an attempt at qD dosing (#msg-57170320).