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Gilead's Stribild Gets FDA Nod

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Gilead Sciences, Inc. (GILD) recently gained US Food and Drug Administration (:FDA) approval for its HIV combination pill, Stribild (formerly known as Quad). Stribild (once-daily) was approved as a first-line therapy for treating adults with HIV-1 infection.

Stribild is a combination of elvitegravir, cobicistat and Truvada. We note that Truvada itself is a combination of Viread and Emtriva.  

The FDA approval did not come as a surprise, as in May 2012, an FDA advisory panel had voted overwhelmingly (13-1) in favor of clearing the combination pill in the US.

Approval was based on encouraging data from two late-stage studies -- 102, which compared Stribild to Atripla and 103, which compared Stribild to Norvir (ritonavir)-boosted Reyataz plus Truvada. While Norvir is marketed by Abbott Labs (ABT), Reyataz is marketed by Bristol-Myers Squibb (BMY).

Last month, the FDA approved Truvada (once-daily) in combination with safer sex practices for bringing down the risk of uninfected adults getting infected by HIV. The approval makes Truvada the first drug to be approved for preventing HIV in uninfected adults or pre-exposure prophylaxis (PrEP).

Truvada is also approved in combination with other antiretroviral agents as a treatment for HIV-1 infection in adults. The other two components of Stribild, elvitegravir and cobicistat, are currently under regulatory review.

Neutral on Gilead

We currently have a Neutral recommendation on Gilead. The stock carries a Zacks #3 Rank (Hold rating) in the short run. We remain optimistic on the growth prospects of Gilead's HIV drugs, Truvada and Atripla. We are also encouraged by the sales ramp of the newly launched Complera/Eviplera, which together with Stribild, will further fortify the HIV franchise and help mitigate the impact of upcoming patent expirations.

Gilead is looking to combat the threat of genericization by inking deals, making acquisitions and introducing new products. To further strengthen its hepatitis C virus portfolio, Gilead purchased Pharmasset earlier in the year, for approximately $11.1 billion.

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