UPDATE 2-Gilead Quad HIV pill succeeds in midstage study

* Says Quad achieves "noninferiority" to Atripla

* To begin Phase III clinical trials this year

* Shares rise 3.9 percent (Adds analyst comment; updates share price)

NEW YORK, Feb 17 (Reuters) - Gilead Sciences Inc (GILD.O) said its closely watched four-medicine combination HIV pill known as Quad had succeeded in a midstage clinical trial comparing it with the company's widely used Atripla three-drug treatment.

Analysts said the results were largely in line with expectations, and the biotechnology company's shares rose nearly 4 percent.

Based on these results, Gilead said on Wednesday that it expected to begin large Phase III trials of Quad by the middle of this year. Phase III is typically the final stage of human testing before a new drug is submitted to regulators for approval.

After 24 weeks of treatment in the Quad-Atripla study, 90 percent of patients taking Quad achieved target reductions in levels of the HIV virus in the blood, known as viral load, compared with 83 percent of those who received Atripla.

While the Phase II study had low power for formal efficacy comparisons, Gilead said Quad met the statistical criteria of "noninferiority" to Atripla -- the study's primary objective.

Discontinuation rates due to adverse events were comparable among both groups, the company said.

A big concern ahead of the full data presentation was the risk of kidney toxicity associated with a component of the drug known as cobicistat, which increases blood levels of certain HIV medicines.

"Kidney function data looks solid," JPMorgan analyst Geoffrey Meacham said in a research note.

Two serious cases of rash and anemia occurred among cobicistat-treated patients, Gilead said.

"These positive efficacy and safety results indicate that the Quad has the potential to become an important new treatment option in HIV therapy," Calvin Cohen, lead researcher of the study, said in a statement.

Researchers will present the data later on Wednesday at the Conference on Retroviruses and Opportunistic Infections in San Francisco.

The Quad pill combines cobicistat with elvitegravir, an experimental integrase inhibitor for HIV, and Truvada, a two-medicine HIV treatment sold by Gilead.

Gilead is also studying cobicistat as a stand-alone boosting agent for other antiretroviral medications. The company said it planned to begin Phase III studies of that drug later this year.

Gilead shares were up 3.9 percent at $48.67 in afternoon trading on Nasdaq. (Reporting by Bill Berkrot in New York and Deena Beasley in Los Angeles; editing by John Wallace and Lisa Von Ahn)