Replies to post #122516 on Biotech Values

[DewDiligence]

If I were GILD and "the only game in town" as far as [HIV] nuke backbones are concerned, I would make each additional collaboration more lucrative for myself…

Agreed. GILD has said that the Btripla arrangement with JNJ is somewhat more favorable than the Atripla arrangement with BMY; GILD pays JNJ a discounted price for Edurant, but it pays BMY the full list price for Sustiva.

[oc631]

If I were GILD and "the only game in town" as far as nuke backbones are concerned, I would make each additional collaboration more lucrative for myself, especially now that I have my own third agent (elvitegravir) and my own fixed-dose combination (quad) to think about.

The original idea with the "quad" was to bring all future HIV profits in-house. A move away from partnered Atripla and a chance to lock up the market. Btripla seemed like a step backward (using Tibotec's TMC278) but an understandable hedge against an unforeseen safety or development issue with the quad at the time. Now there's plans for another quad pill using Tibotec's Prezista and IMO another step backward. This doesn't say much for the R&D strategy at GILD and explains why the stock is trading at such a low multiple.

[DewDiligence]

GILD, JNJ close the deal to collaborate on Prezista-based all-in-one HIV pill:

http://finance.yahoo.com/news/Gilead-Sciences-Finalizes-bw-2357363404.html?x=0&l=1

This deal was announced in June (#msg-64697419) but did not become official until today. (I wonder what took so long.)

The four drugs in the combo pill are Prezista (JNJ’s PI), Cobicistat (GILD’s PK booster), Emtriva (one of the two nukes in Truvada), and GS7340, a prodrug of tenofovir in phase-1b that is similar to Viread (#msg-62301844).

Prezista-based cocktails have an 8% share of the US market, according to GILD’s 2Q11 CC (#msg-65585689). Inasmuch as an HIV therapy is taken forever (as long as it keeps working), having a single pill ought to boost the market share to a meaningful degree.

[DewDiligence]

FDA issues CRL for 800mg dose of Prezista:

http://finance.yahoo.com/news/fda-issues-complete-response-letter-130000820.html

This one is a head-scratcher insofar as the normal adult dose of Prezista in the existing FDA label is 800mg qD in the form of two 400mg tablets.* The only change being sought by JNJ is to offer the 800mg in a single pill.

Prezista has been a decent-selling drug for JNJ, and its sales could increase further if the JNJ-GILD collaboration to develop a Prezista-based all-in-one HIV pill pans out. The unnamed all-in-one pill would include Prezista, Emtriva (one of the components of Truvada), Cobicistat (the PK booster in Quad), and GS-7340, a prodrug of tenofovir that is similar to Viread (#msg-69031745).

*The FDA label specifies 600mg BID for patients who have developed partial resistance to Prezista.

[DewDiligence]

GILD/JNJ revise collaborations re Prezista- and Edurant-based FDCs for HIV:

http://finance.yahoo.com/news/janssen-announces-collaboration-gilead-develop-133000484.html

Janssen R&D Ireland announced today an amendment to its existing agreement with Gilead Sciences, Inc., initially established in 2011 [#msg-64697419], for the development of a once daily, darunavir-based, single-tablet regimen (STR) for the treatment of people living with HIV. This new STR contains a combination of darunavir (PREZISTA), cobicistat (TYBOST), emtricitabine and tenofovir alafenamide (TAF).

…Under this amended agreement, Janssen will conduct all further clinical development of the regimen and, subject to regulatory approval, will be responsible for all manufacturing, registration, distribution and commercialization of the product worldwide.

…Janssen and Gilead have also expanded a separate agreement initiated in 2009 regarding the approved single-tablet regimen, COMPLERA [#msg-39660789], marketed as EVIPLERA in the European Union (EU) (rilpivirine, tenofovir disoproxil fumarate (TDF) and emtricitabine). This expanded agreement will allow for Gilead's investigational tenofovir alafenamide (TAF), a novel nucleotide reverse transcriptase inhibitor, to replace TDF [Viread] within COMPLERA/ EVIPLERA… Gilead will be responsible for the development and commercialization in most countries, while Janssen will lead the commercialization in select markets.