Replies to post #122541 on Biotech Values

[north40000]

I have a fond wish that JNJ acquires GILD in a stock exchange. The fit between Tibotec[one of JNJ's better acquisitions, IMO] and GILD appears to be a good one.

[NP1986]

The neuropsychiatric side effects of efavirenz are sometimes an issue with Atripla, so I think Btripla will primarily be used in patients who are intolerant to efavirenz. If I'm not mistaken, the incidence of these side effects are lower with rilpivirine.

The main stumbling block for Btripla will be concerns about its efficacy, so I don't think it will cannibalize Atripla's market share substantially. I don't see it being used a lot in 2nd line if patients have virological failure on Atripla. However, a quad pill with Prezista could be a different story - provided cobicistat's long term safety profile is deemed acceptable. It might cannibalize some Atripla use in first line, but it could provide some growth for Gilead in treatment-experienced patients.

I think the reason why Gilead's stock price has stagnated recently is because its sales for its HIV franchise are not likely to grow substantially. IIRC, sales did drop in the first quarter this year. The quad pill might change this, but I think there will be significant competition from ViiV's own NRTI-integrase inhibitor combo.

[oc631]

This is quite a presumptuous statement by UBS if true


http://seekingalpha.com/article/277464-johnson-johnson-gilead-deal-could-yield-more-combinations-in-hiv

The timing of the deal, however, has led UBS to question whether the pharma giant [JNJ] might have seen some of Gilead's Quad data, a read out of which is widely expected in the third quarter of the this year, and made its decision based on this (Event - Gilead manufacturing subpoena could steal Quad limelight, June 13, 2011).

If this is the case, then it is unlikely the data is bad, which should bode well for both the final read out and Quad approval.

[DewDiligence]

GILD—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.

That’s unduly harsh, IMO. GS-7340 gives GILD a shot at developing what I’ll call Quad Prime: Elvitegravir + Cobicstat + Emtriva + GS-7340. If it works, this 4-in-1 pill will be 100% owned by GILD and will have patent protection for many years to come.