Gilead is gearing up to defend its leadership position in HIV against encroaching generic competition, and the first step will be to file for approval of a new triple combination, a drug combining Gilead's Truvada (emtrictabine/tenofovir) with Johnson & Johnson's investigational non-nucleoside reverse transcriptase inhibitor TMC278 (rilpivirine), later this year.

During a second-quarter sales and earnings call July 20, management said it is on track to file the fixed-dose combination application around the same time J&J files for regulatory approval of TMC278. J&J, meanwhile, during a separate same-day call, said it is on track to file the NNRTI in the third quarter.

Gilead is hoping the new combination will replace its current top-selling drug, the triple combination Atripla , which combines Truvada with Bristol-Myers Squibb's NNRTI Sustiva (efavirenz), as the standard triple combination antiretroviral treatment for HIV. That's because Sustiva will face generic competition in 2013, which could impact sales of Atripla. TMC278, a next-generation NNRTI, is expected to have a better tolerability profile compared to Sustiva, particularly regarding CNS side effects. How the new triple combination actually will stack up to Atripla in clinical practice and hold up under payer pressure remains to be seen, however.

TMC278 Phase III Data Mixed

Gilead's second-quarter call coincided with the International AIDS Conference taking place in Vienna, Austria, where J&J is slated to announce the results of two pivotal Phase III studies evaluating TMC278 compared to Sustiva for the treatment of HIV in treatment-naive patients July 22. Preliminary results were released July 19, however, in an abstract and pooled analysis of the two trials, ECHO and THRIVE. Those data show TMC278 successfully met the primary efficacy endpoint of non-inferiority to Sustiva.

The pooled analysis of 1,368 patients showed that 84.3 percent of patients in the TMC278 group reached an undetectable viral load at 48 weeks compared to 82.3 percent of patients in the Sustiva arm of the trial. Both groups were treated once daily with a nucleoside/nucleotide reverse transcriptase inhibitor (NRTI) background regimen (like Truvada). Patients in the TMC278 arm reported fewer adverse events leading to discontinuation. However, that group also had a higher virologic failure rate (9 percent versus 4.8 percent in the Sustiva arm).

The virologic failures - patients whose virus either was not suppressed or rebounded after being lowered - are not altogether surprising, since the data are in line with the Phase II results. But the abstract showed a higher rate of failures due to the development of class resistance mutations (39 versus 15) and also to the development of resistance mutations to another class of drugs, NRTIs (42 versus 9). The resistance issue could be a concern to clinicians, and following the release of the preliminary data, analysts were uncertain about the implications.

"This is quite a problem," Bernstein Research analyst Geoff Porges speculated in a July 19 research note. "If in a well controlled clinical trial setting, 6 percent develop resistance to the class in question (non nukes) and roughly the same number also develop resistance to another class, within one year on treatment, the long-term efficacy becomes quite uncertain."

RW Baird & Co. analyst Thomas Russo, however, sounded less concerned in a July 19 research note. He pointed out that while the virologic failure looked worse than Sustiva in the analysis, in Phase IIb trials, the difference narrowed by 96 weeks. "Truvada/278 looks intact as a valid front-line option with incrementally better economics/earnings than Atripla and extend patent/cash flows life," he said.

Gilead management defended the new combination during the sales call. Chief Scientific Officer Norbert Bischofberger said the two drug makers are looking at baseline predictors for the virological failures, like viral load and body weight. "If we could find some easy baseline predictors, that would minimize the whole issue of virological failures," he said. Despite the virological failures, the efficacy and tolerability profile of the combination make a strong case for long-term use since patients are more likely to stay compliant, thus resulting in fewer virological failures over the long-term, he added.

Investors Still Iffy On Diversification Strategy

But Gilead still needs to convince investors that it has the wherewithal to extend its portfolio beyond Atripla and Truvada, which could face its own patent expirations in the 2018 timeframe, and outside HIV, a therapy area that is experiencing increased competition not only from generics but also newer classes of medicines like integrase inhibitors. Given the company's dependence on Atripla and Truvada (those drugs accounted for 69 percent, or $4.87 billion, of Gilead's 2009 revenues), investors are jittery on the stock. Gilead's opening stock price of $32.51 July 21 was down 25 percent since the start of the year.

Beyond the Truvada/TMC278 combo, Gilead is developing a "quad" regimen for HIV, a single-tablet combining Truvada with the investigational integrase inhibitor elvitegravir and an antiretroviral boosting agent cobicistat. The company initiated a Phase III program for the quad pill in the second quarter.

But both combination pills have under-whelmed investors, who are eager to see the company bring to market a novel medicine in a new area. Gilead has reassured investors it intends to diversify outside of HIV, but thus far, its attempts haven't borne out. The Phase III flop of darusentan, a promising candidate for resistant hypertension, was a big disappointment ('Pharmaceutical Approvals Monthly, Dec. 1, 2009).

Hepatitis C is one area in which investors are hopeful, though still wary. Gilead is making a strategic push into HCV, but hasn't provided many details on the pipeline. Last month, the company scored a recruitment coup, the hiring of Duke University's renowned HCV expert John McHutchison, MD, to oversee liver disease research (Also see "Gilead Recruits Hepatitis C Specialist McHutchison In Show Of Commitment" - Pink Sheet, 9 June, 2010.).

Gilead has five small molecules in clinical development and two more about to enter the IND stage, representing six classes of drugs that could be explored in combinations, President John Milligan confirmed during the call. Among those drugs is a polymerase inhibitor in Phase IIb testing and a protease inhibitor that has completed Phase I testing; the two are being studied now in combination.

The firm said it plans to release more information about the pipeline during the American Association for the Study of Liver Diseases meeting in late October.

Gilead's second-quarter results came in below consensus expectations due mainly to the stronger U.S. dollar and European pricing pressure. Nonetheless, Gilead reported revenues of $1.93 billion, up 17 percent over the year ago period, and net income up 24 percent to $709.1 million.

-Jessica Merrill (j.merrill@elsevier.com)

Gilead: Near-Term Drug Filings Planned, But HIV Pressure Persists

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