Investing in the Companies that will Beat HIV
Andrés is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
While the stock market can't stop dancing to the tune of macroeconomic problems all over the world, there are much more interesting things going on under the surface, in the world of innovation and technological advancement. Some days ago, the Food and Drug Administration (FDA) approved Truvada as the first drug targeted towards reducing HIV infection risk for uninfected individuals who are at high risk of HIV infection and who may engage in sexual activity with HIV-infected partners.
The pill was developed to treat people already infected with HIV. But studies published by the New England Journal of Medicine demonstrate that it can also prevent heterosexual transmission of HIV, the most common mode of contagion in Africa. There are many things which need to be worked out in order to achieve economic viability for Truvada as a prevention medicine for HIV, but this is an important step in the right direction.
".... approval marks an important milestone in our fight against HIV," said FDA Commissioner Margaret A. Hamburg, M.D. "Every year, about 50,000 U.S. adults and adolescents are diagnosed with HIV infection, despite the availability of prevention methods and strategies to educate, test, and care for people living with the disease. New treatments as well as prevention methods are needed to fight the HIV epidemic in this country."
The drug is produced by Gilead (NASDAQ: GILD), a biopharmaceutical company which focuses on the research, development and marketing of anti-infective medications, with a primary focus on treatments for HIV. Truvada, approved in 2004, is a once-daily combination tablet formulated with previous-generation drugs Viread and Emtriva. Truvada generated 2011 sales of $2.88 billion, 8% above 2010.
Gilead is a leader in HIV treatment, and it has leveraged its portfolio of patents to develop more efficient treatments via drug combinations and partnerships with other companies.
In 2006 the company partnered with Bristol-Myers Squibb (NYSE: BMY) to launch Atripla, a combination tablet with Truvada and Sustiva. Atripla generated 2011 sales of $3.22 billion, up 10% from 2010, and surpassed Truvada in sales during the fourth quarter of 2009. Atripla, constituted more than one third of Gilead's top line in 2011.
A combination of Truvada and Johnson & Johnson's (NYSE: JNJ) Edurant, was approved in the U.S. and Europe during 2011, marketed as Complera and Eviplera, respectively. The drug has had a strong launch, which indicates that its slightly improved side effect profile versus Atripla outweighs the risk of drug resistance for certain populations, such as women of child-bearing age.
Gilead received some encouraging news recently when an advisory panel of the U.S. Food and Drug Administration recommended the approval of the company’s HIV combination pill Quad. The committee voted 13-1 in favor of approval, so a final clearance by the FDA is expected in August.
Quad, an all-Gilead regimen containing inhibitor candidate Elvitegravir, could enter the market during 2012 and has some very promising potential, although it will face tough competition in the integrate inhibitor space from Merck's (NYSE: MRK) established drug Isentress as well as potential new entrants currently under development stage.
Gilead owns a very strong portfolio of products in treatment, and now even prevention, of HIV. The company has been developing new drugs in alliance with other corporations, and has a deep pipeline of products with innovative potential. Humankind will sooner or later get rid of HIV, and Gilead looks like a very strong candidate to benefit from this evolution.
acardenal has no positions in the stocks mentioned above. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services recommend Gilead Sciences and Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
