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Gilead (GILD) Up on Settling HIV Drug Suit With Generic Players

·3 min read

Shares of Gilead Sciences, Inc. GILD gained 4.2% after management announced agreements with a few generic manufacturers to resolve the litigation and patent challenges associated with some of GILD’s HIV treatments in the U.S. District Court for the District of Delaware.

Gilead settled litigations with Lupin Ltd., Apotex Inc., Macleods Pharma Ltd., Hetero Labs Ltd. and Cipla Ltd for patent challenges associated with Descovy, Vemlidy and Odefsey.

Per the settlement agreement, Gilead granted the generic manufacturers a non-exclusive license in the United States for its patents on tenofovir alafenamide relating to Descovy and Vemlidy beginning Oct 31, 2031, and to Odefsey beginning Jany 31, 2032.  This, in turn, extends the exclusivity of these treatments from generics to this time frame.

The agreements will be filed with the U.S. Federal Trade Commission and the U.S. Department of Justice as required by law.

The news bode well for Gilead as the loss of exclusivity for another HIV treatment Truvada hurt its business.

Gilead’s HIV portfolio continues to maintain momentum, driven by higher demand for flagship HIV therapy Biktarvy. Descovy sales also boosted its top line.

The stock has lost 6.3% so far in the year compared with the industry's decline of 20.9%.

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Gilead’s new HIV treatment Sunlenca (lenacapavir) was recently approved by the European Commission (EC).

The EC granted marketing authorization to Sunlenca injection and tablets for treating HIV infection. This is done in combination with other antiretroviral(s) in adults with a multi-drug resistant HIV infection for whom it is otherwise not possible to construct a suppressive anti-viral regimen.

Per management, most anti-virals act on just one stage of viral replication, while Sunlenca is designed to inhibit HIV at multiple stages of its lifecycle and has no known cross-resistance to other existing drug classes. In addition, Sunlenca is the only HIV treatment option administered twice yearly.

The approval will strengthen Gilead’s strong HIV portfolio.

Last month, the FDA also accepted GILD’s new drug application (NDA) resubmission for lenacapavir. The agency assigned a target action date of Dec 27, 2022.

Competition is stiff in the HIV business from the likes of GSK plc GSK.

GSK’s HIV franchise recorded 7% growth in the second quarter. Growth was driven by new HIV products Dovato, Cabenuva, Rukobia, Juluca and Apretude, and a favorable U.S. pricing mix.

Gilead currently carries a Zacks Rank #3 (Hold).  Two better-ranked stocks in the sector are Bolt Pharmaceuticals BOLT and Dynavax DVAX, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Loss estimates for BOLT have narrowed to $2.25 from $2.87 in the past 60 days. Earnings surpassed estimates in three of the trailing four quarters and missed the mark in the remaining one, the average beat being 2.39%.

Dynavax’s earnings estimates have increased to $1.73 from $1.14 for 2022 over the past 60 days. Earnings of DVAX surpassed estimates in two of the trailing four quarters and missed the mark in the remaining two, the average beat being 70.57%.

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