Gilead Sciences, Inc. (NASDAQ:GILD) said Thursday that the European Commission has granted approval to its once-daily single tablet regimen Odefsey for the treatment of HIV-1 infection in some patients. The biotech giant now has three new formulations of its aging HIV drugs cleared for use in both the US and European Union.
Odefsey is a safer replacement of Gilead’s older HIV drug, Complera. It is a three-drug combination treatment of emtricitabine, rilpivrine, and tenofovir disoproxil fumarate (TDF). Odefsey is similar to Complera in composition, but replaces TDF with a new salt called tenofovir alafenamide (TAF). Trial data have shown TAF to be 10 times more potent than TDF, allowing it to be used in smaller doses and to be less toxic to patient’s kidneys and bones. TDF or Viread forms the basis of Gilead’s older HIV and hepatitis B (HBV) drugs; the drug generated $1.1 billion in sales last year. Viread is due to lose patent protection by the end of 2017, while the $1.4 billion Complera is scheduled to go off-patent in 2023.
Gilead has been working hard to introduce alternatives to these blockbuster drugs to market. Since late last year, the Food and Drug Administration (FDA) has approved three of the company’s TAF-based HIV medicines. Besides Odefsey, these include a four-drug combination product called Genvoya (elvitegravir, emtricitabine, rilpivirine, and TAF), which is a reinvention of Gilead’s $1.8 billion Stribild brand, and a two-drug combination drug called Descovy (emtricitabine and TAF), which is a replacement for Gilead’s $3.5 billion Truvada brand. With Descovy and Genvoya already approved in the past few months, Odefsey marks the third TAF-based approval in Europe.
According to Gilead, Odefsey is the smallest pill among all single-tablet regimens used for the treatment of HIV. The drug is prescribed as a complete regimen for all HIV-1 patients aged 12 years or older with no antiretroviral therapy history and HIV-1 RNA levels equal to or lower than 100,000 copies per mL. The company's EVP, R&D, and Chief Scientific Officer Norbert Bischofberger said in a statement: "The approval of Odefsey underscores Gilead's ongoing commitment to researching and developing new treatment options to help address the evolving needs of a range of HIV patients. Through our new portfolio of products based on the Descovy backbone, Gilead is pleased to offer effective treatments and simple dosing options for people living with HIV, which has now become a chronic condition for most patients."
According to the World Health Organization’s 2014 estimates, roughly 37 million people were infected with HIV, out of which 60% are said to have no proper access to treatment. The deadly disease has no actual cure in the market as yet, with available therapies only aimed at preventing multiplication of the virus. Gilead holds some 50% share of the HIV market currently, with companies like Merck & Co, Johnson and Johnson and AbbVie making up the remaining market share. Genvoya, approved in November, pulled in $158 million in first-quarter sales — its first full quarter in market — compared to consensus estimates bordering around $70 million.
Maxim Group analyst Jason Kolbert highlighted in a May research note that an estimated 50% of patients currently on Genvoya shifted from Stribild. “Genvoya should become the successor to Stribild, in our opinion,” he said. He also expects patients on Gilead’s Atripla (efavirenz, emtricitabine and TDF) to switch to Genvoya with time, since the former is no longer recommended as a first-line HIV therapy by the US Department of Health & Human Services (DHHS), and was downgraded in April last year. Atripla generated some $3.1 billion in 2015 sales. Citing bullish views about the company’s HIV franchise, Maxim raised its 2016 sales forecast by $76 million to $30.09 billion. The research firm also hiked Gilead’s 2017 sales estimate to $30.9 billion from $30.7 billion and 2018 estimate to $31.8 billion from $30.9 billion.
In recent years, Gilead has been facing the biggest threat in HIV from GlaxoSmithKline’s ViiV healthcare unit and its competing single-tablet HIV regimen, Triumeq. Bloomberg Intelligence analysis projects Triumeq’s 2020 sales to come in at $4.2 billion, with Genvoya pulling in some $2.7 billion. Despite this, Gilead is expected to sustain its HIV lead through 2020, with an estimated 56% of market worth and some $14 billion in sales. GSK, in comparison, is projected to account for 28% of the market. GSK’s ongoing research in the first monthly anti-HIV shots in partnership with JNJ may pose a bigger threat in future.
HIV treatments make up the second-biggest business segment of Gilead, driving about 35% of its top-line. The company is facing declining sales from its biggest revenue driver, hepatitis C drugs, from this year forward, after having pulled in more than $31 billion in the past two years. The franchise makes up about two-thirds of Gilead’s top-line. The company is already under tremendous pressure to find an alternate revenue source to match performance of its HCV drugs Harvoni/Sovaldi.
Gilead stock is trading at a forward price-to-earnings multiple of barely seven, having lost more than 18% of its value so far this year. HIV seems to be the one business Gilead can depend on for now.
Odefsey is a safer replacement of Gilead’s older HIV drug, Complera. It is a three-drug combination treatment of emtricitabine, rilpivrine, and tenofovir disoproxil fumarate (TDF). Odefsey is similar to Complera in composition, but replaces TDF with a new salt called tenofovir alafenamide (TAF). Trial data have shown TAF to be 10 times more potent than TDF, allowing it to be used in smaller doses and to be less toxic to patient’s kidneys and bones. TDF or Viread forms the basis of Gilead’s older HIV and hepatitis B (HBV) drugs; the drug generated $1.1 billion in sales last year. Viread is due to lose patent protection by the end of 2017, while the $1.4 billion Complera is scheduled to go off-patent in 2023.
Gilead has been working hard to introduce alternatives to these blockbuster drugs to market. Since late last year, the Food and Drug Administration (FDA) has approved three of the company’s TAF-based HIV medicines. Besides Odefsey, these include a four-drug combination product called Genvoya (elvitegravir, emtricitabine, rilpivirine, and TAF), which is a reinvention of Gilead’s $1.8 billion Stribild brand, and a two-drug combination drug called Descovy (emtricitabine and TAF), which is a replacement for Gilead’s $3.5 billion Truvada brand. With Descovy and Genvoya already approved in the past few months, Odefsey marks the third TAF-based approval in Europe.
According to Gilead, Odefsey is the smallest pill among all single-tablet regimens used for the treatment of HIV. The drug is prescribed as a complete regimen for all HIV-1 patients aged 12 years or older with no antiretroviral therapy history and HIV-1 RNA levels equal to or lower than 100,000 copies per mL. The company's EVP, R&D, and Chief Scientific Officer Norbert Bischofberger said in a statement: "The approval of Odefsey underscores Gilead's ongoing commitment to researching and developing new treatment options to help address the evolving needs of a range of HIV patients. Through our new portfolio of products based on the Descovy backbone, Gilead is pleased to offer effective treatments and simple dosing options for people living with HIV, which has now become a chronic condition for most patients."
According to the World Health Organization’s 2014 estimates, roughly 37 million people were infected with HIV, out of which 60% are said to have no proper access to treatment. The deadly disease has no actual cure in the market as yet, with available therapies only aimed at preventing multiplication of the virus. Gilead holds some 50% share of the HIV market currently, with companies like Merck & Co, Johnson and Johnson and AbbVie making up the remaining market share. Genvoya, approved in November, pulled in $158 million in first-quarter sales — its first full quarter in market — compared to consensus estimates bordering around $70 million.
Maxim Group analyst Jason Kolbert highlighted in a May research note that an estimated 50% of patients currently on Genvoya shifted from Stribild. “Genvoya should become the successor to Stribild, in our opinion,” he said. He also expects patients on Gilead’s Atripla (efavirenz, emtricitabine and TDF) to switch to Genvoya with time, since the former is no longer recommended as a first-line HIV therapy by the US Department of Health & Human Services (DHHS), and was downgraded in April last year. Atripla generated some $3.1 billion in 2015 sales. Citing bullish views about the company’s HIV franchise, Maxim raised its 2016 sales forecast by $76 million to $30.09 billion. The research firm also hiked Gilead’s 2017 sales estimate to $30.9 billion from $30.7 billion and 2018 estimate to $31.8 billion from $30.9 billion.
In recent years, Gilead has been facing the biggest threat in HIV from GlaxoSmithKline’s ViiV healthcare unit and its competing single-tablet HIV regimen, Triumeq. Bloomberg Intelligence analysis projects Triumeq’s 2020 sales to come in at $4.2 billion, with Genvoya pulling in some $2.7 billion. Despite this, Gilead is expected to sustain its HIV lead through 2020, with an estimated 56% of market worth and some $14 billion in sales. GSK, in comparison, is projected to account for 28% of the market. GSK’s ongoing research in the first monthly anti-HIV shots in partnership with JNJ may pose a bigger threat in future.
HIV treatments make up the second-biggest business segment of Gilead, driving about 35% of its top-line. The company is facing declining sales from its biggest revenue driver, hepatitis C drugs, from this year forward, after having pulled in more than $31 billion in the past two years. The franchise makes up about two-thirds of Gilead’s top-line. The company is already under tremendous pressure to find an alternate revenue source to match performance of its HCV drugs Harvoni/Sovaldi.
Gilead stock is trading at a forward price-to-earnings multiple of barely seven, having lost more than 18% of its value so far this year. HIV seems to be the one business Gilead can depend on for now.
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