Gilead Sciences, Inc. Will Have Higher Revenues, EPS On Liver Drug Strength: Citi

October 9, 2014

By Riley McDermid, BioSpace.com Breaking News Sr. Editor

Gilead Sciences, Inc. is still in the lead for commanding market share of liver drugs and should have some interesting data at next month’s American Association for the Study of Liver Diseases’s conference, said Citigroup biotech analyst Yaron Werber. All of the industry’s biggest names will be hoping to garner the attention of investors and analysts at the Nov. 7-11 conference in Boston. So far, Gilead outpaces all of them, said Werber.

“There is a lot of interesting data to be presented at the AASLD meeting from Nov 7-11 in Boston,” he wrote in a note to investors. “Our conclusion is that the market is becoming more competitive albeit Gilead is clearly in the lead.” Werber also said the upcoming approval of Harvoni (SOF/LDV) is raising the bar for the competition and will set a 95 percent cure rate with an 8 to 12 week regimen.

“We remain bullish on Gilead and expect 2015 revenues and earnings per share to be materially above consensus,” he wrote. Merck & Co., Inc. will likely be its primary competition going forward.

The Citi analyst also had some “high level thoughts” on Gilead’s pan-genotypic inhibitor GS-5816, which combined with its blockbuster drug Sovaldi looked good in testing on patients with chronic, genotype 1 (GT1) hepatitis C virus.

“So that will fix the current Achilles heel of SOF/LDV. Importantly, new data shows that Sovaldi is safe in patients with renal impairment, has high efficacy in HIV/HCV co-infected patients, and showed high cure rate in Japanese genotype 2 patients,” wrote Werber.

The liver market is getting more competitive, after a 12 weeks study of Merck’s MK-5172+MK-8742 led to 100 percent SVR12 in GT1 naïve cirrhotics and 91 percent in tougher to treat PR null cirrhotics. That data also showed 89 percent efficacy in HIV/HCV co-infected patients.

“Merck's next generation NS5A inhibitor MK-8408 looks potent and has pan-genotypic activity. Achillion’s nuc ACH-3422 when compared to Sovaldi showed better potency in replicon model especially in genotype 3, a segment where Sovaldi is not as potent,” said Werber. “As expected, Achillion’s ACH-3102+Sovaldi lead to equivalent cure rate with 8-weeks of treatment, showing that ACH-3012 has good efficacy.”

Werber said he believes Achillion’s ACH-3422 and ACH-3012 regimen could be “a threat to Harvoni in the long run, but is still early in development” will take several years to get to market.

“Overall, Gilead is still ahead of competition in hepatitis C but the competition is heating up,” he concluded.