Processing Magazine

Push for more HIV screens to drive Gilead''s growth

June 30, 2008
According to the Associated Press, increasing efforts by U.S. cities such as New York to expand HIV testing will boost Gilead Sciences'' bottomline, since more than 80 percent of the nation''s newly diagnosed HIV patients begin treatment with either the company''s Truvada or Atripla combination pills.

Foster City, Calif.-based Gilead generates most of its revenue from its HIV franchise, which includes the drugs Viread, Emtriva, Truvada (a combination of Viread and Emtriva) and Atripla, which combines Truvada and Bristol-Myers Squibb Co.''s Sustiva. The combination pills make it easier for patients to comply with the drug "cocktail" regimen usually required by doctors.

RBC Capital Markets analyst Jason Kantor said New York City''s new initiative to test for HIV infection in about 250,000 "un-tested" residents of the Bronx borough is one step closer to universal HIV testing.

The target market for HIV drugs will continue to expand based on the CDC''s new recommendations for routine testing and reduced consent hurdles, which aim to test all patients that enter the healthcare system, whether via the emergency room or community clinics.

Aside from HIV drugs, Gilead also makes the hepatitis B treatment Hepsera. A decision by the Food and Drug Administration on whether use of HIV drug Viread will be expanded in the U.S. to include hepatitis B treatment is expected Aug. 11. Viread is already approved in Europe to treat both diseases.

William Blair analyst John Sonnier said the market for hepatitis B drugs is significant, since of the nation''s estimated 1.2 million infected, only 260,000 have been diagnosed and just 53,000 are on oral drug therapy. The European market opportunity is even more dramatic, he said.

In a note to clients, Sonnier forecast that Gilead will see Hespera sales of $330 million and $342 million in 2008 and 2009, respectively, excluding potential Viread sales. He thinks the company''s HIV franchise will generate sales of $4.2 billion in sales in 2008 and $4.7 billion in 2009.

The analyst also said a future growth opportunity for Gilead lies in hepatitis C treatments. Currently this marks the most aggressive area of R&D investment at Gilead, with the company holding what Sonnier called the most-advanced clinical candidate in this arena -- GS 9190. It also has other candidates in development with partner Achillion.