UPDATE 2-FDA rejects two Gilead HIV drugs as standalone products

Mon Apr 29, 2013 10:32am EDT

By Toni Clarke
    WASHINGTON, April 29 (Reuters) - Gilead Sciences Inc
 said on Monday that U.S. health officials rejected two
of its HIV drugs as standalone therapies, citing deficiencies in
documentation and validation of certain quality testing
procedures.
    Gilead said it is working with the U.S. Food and Drug
Administration to address the questions raised in the rejection
letter in order to prove the application forward.
    The company is seeking approval for its drug elvitegravir
for people with HIV, the virus that causes AIDS, who have
already been treated with other products. The drug blocks the
enzyme integrase which is needed for the HIV virus to replicate.
    Gilead is also seeking approval of cobicistat, a drug that
does not itself fight the virus but boosts the function of other
HIV medicines.
    Both drugs are already contained in Gilead's once-daily
single-tablet HIV treatment Stribild, which combines four
different medications and was approved in the United States last
August. 
    "The FDA, in its review, did not question the safety profile
of either drug, which leads us to believe this is more of a
delay than an overall drug profile problem," said Matthew Roden,
an analyst at UBS Securities LLC, in a research note, adding
that the findings "do not impact the marketing and
commercialization of Stribild."
    Analysts on average expect elvitegravir, if eventually
approved, to generate annual sales of about $300 million by 2016
according to Thomson Reuters data. They expect sales of
cobicistat of roughly $242 million over the same period.
    Overall, Gilead's portfolio of antiviral drugs generated
sales in 2012 of $8.14 billion.
    In themselves, elvitegravir and cobicistat comprise only a
small portion of future Gilead revenue and "as such, we view a
delay as immaterial," Brian Abrahams, an analyst at Wells Fargo
Securities, said in a research note. "There are multiple
facilities which produce Stribild and Gilead's other products,
suggesting sufficient supply even if there are any overlapping
issues that escalate," he said.
    HIV treatment typically involves the use of multiple drugs
designed to attack the virus from different angles. Gilead
licensed elvitegravir from Japan Tobacco Inc in 2005
and has the right to market it anywhere except Japan.
    Elvitegravir works in a similar manner to Merck & Co's
 drug Isentress, also known as raltegravir. Isentress is
typically given twice a day. Elvitegravir only needs to be taken
once a day, but it's action needs to be boosted by cobicistat or
an alternative drug that delays the metabolism of elvitegravir.
    Gilead has given a number of Indian generic drugmakers,
including Ranbaxy Laboratories Ltd rights to make
generic versions of elvitegravir and other HIV drugs to be sold
in developing countries.
    Gilead's shares were more or less unchanged at $51.27 in
early trading on Nasdaq.