Analyst: Mighty Gilead Eying Second-Line HIV Marketplace

Editor

Hope for the expanding arsenal of drugs against HIV continued to grow last week with news of Tanox Inc.'s favorable Phase II data from an ongoing trial with TNX-355, the entry inhibitor that's in line to become the first monoclonal antibody available.

Already on the market is Trimeris Inc.'s entry inhibitor Fuzeon (enfuvirtide), partnered with F. Hoffmann-La Roche Ltd., which analyst Andrew McDonald of ThinkEquity Partners LLC said has been "kind of a disaster" because of site reactions. "It causes pretty bad bruising," he said.

"Some people, given the competitive nature of second-line and third-line therapy, wonder how injectable products are going to fare," he said. "Fuzeon has to be injected twice a day. Even if there's a great drug, no one wants to do that if there's a competing product that's almost as good [and is oral or can be injected less often]."

The Tanox study met its primary endpoint with TNX-355 plus optimized background therapy (OBT - the standard of care), proving a statistically significant reduction in viral load compared to placebo plus OBT at week 24.

"It looks great," McDonald said of TNX-355. "That's really pretty impressive for this agent - the efficacy is there. You just have to wonder what it's going to compete with, in terms of an oral drug."

Patients were randomized to get 10 mg/kg, 15 mg/kg or placebo every two weeks, with those in the first group given a loading dose of 10 mg/kg every week for eight weeks, and the study will continue through week 48. Tanox officials told investors during a conference call that the firm plans an end-of-Phase-II meeting with the FDA in early 2006, when dosing will be decided.

TNX-355's once-every-two-weeks injection schedule may provide "pretty good market penetration," McDonald said, estimating sales could reach about $300 million annually, which is not great, but not bad, either.

Speaking of oral drugs, Tanox's news might first have seemed to echo the apparently encouraging Phase IIb data this summer from Incyte Corp., which reported its once-daily pill Reverset, another nucleoside analogue reverse transcriptase inhibitor (NRTI), of which the HIV field includes many, gained a 54 percent response rate, compared to 40 percent in placebo patients. (See BioWorld Financial Watch, Aug. 1, 2005.)

At two weeks, when Reverset was added to therapy, patients gained a 0.7 log drop in viral load overall as compared to placebo patients (who showed no change), and a 1.1 log drop in the subset of patients not using in their background treatment regimen GlaxoSmithKline plc's NRTI 3TC or Emtriva (emtricitabine), the NRTI also known as FTC, from Gilead Sciences Inc., both of which are deployed as first-line treatments.

At 16 weeks in the overall group, when the 200-mg dose of Reverset was used as add-on therapy in either an optimized or non-optimized regimen, patients given Incyte's drug came up with a 1.2 log drop in viral load vs. a 0.8 log drop for placebo patients and a 1.4 log drop in viral load in the subset of patients not also getting 3TC or FTC, vs. a 0.5 log drop for placebo patients.

What investors didn't like about the Incyte trial, which caused them to trim the company's stock by about 15 percent when the results were disclosed, was that it was not geared to produce the kind of "p" value data that would be expected from a Phase III study, though it did turn up important data for the design of that study, which Incyte said in late July likely would begin by year's end.

Last month, however, brought bad news. Wall Street walloped Incyte again, this time by 41 percent, on word that the FDA wants yet another Phase II study, which delays any market launch (originally targeted for early 2008) by 12 months to 18 months. The company will shoot for making the confirmatory Phase II study stand as one of two registration trials, and the FDA has sent promising signals. Still, the unexpected trial put a dent in plans.

Doing much better is the HIV powerhouse Gilead, which last month chalked up another round of satisfying earnings, beating consensus estimates by a penny. The firm posted net income of $179.2 million, or 38 cents per share, for the three months ending Sept. 30, compared to net income of $113.2 million, or 25 cents per share for the third quarter of 2004. Total revenues topped out at $493.5 million, with much of that coming from sales of HIV drugs Viread (tenofovir disoproxil fumarate), an NRTI, and Truvada (a combination of Viread and Emtriva).

Gilead has "adopted a strategy that more or less assures that Truvada will be the mainstay of HIV therapy for decades," McDonald told BioWorld Financial Watch. "The key is doing the fixed-dose combination," he added, which can be combined with any third agent.

Even better, more HIV drugs can be added to the first two as a single pill, thus extending the patent life for the overall compound still farther.

Truvada, McDonald noted, was "late to market behind Combivir, GSK's fixed-dose oral combo [of lamivudine and zidovudine], but because Truvada is superior - and that's been proved now in a head to head study - it's been slowly eroding Combivir. That will continue to accelerate as patients decide they want to switch."

Gilead also is collaborating with Bristol-Myers Squibb Co. to create a once-daily, triple-drug regimen by combining Truvada with BMS' HIV non-nucleoside reverse transcriptase inhibitor Sustiva (efavirenz). The companies reported a minor setback in August when a formulation of the fixed-dose tablet failed to show bioequivalence. They decided to formulate the two drugs separately and combine them into tablet form using bi-layered technology. Three bi-layered formulations are in development, and Gilead anticipates a new drug application in the first half of 2006.

"Right now, you've got front-line therapy locked up by Gilead, but if [patients] were to fail front line, that's when it starts to become a little more interesting," McDonald said. "Some patients are just not going to respond well on the front-line therapy, or resistance is going to emerge at some point. You're going to have an increasing population of patients who fail first line, second line and even third line. Agents like Tanox's product, or even Fuzeon, would get used in salvage line and work their way up. But it's really hard to predict how far up the food chain these products will move."

Would-be Gilead competitors are "really aiming for second line. Maybe one day [the annual market] could go to $500 million, if you had the best agent."

Gilead, of course, is looking for that "best agent" itself, which could come from any one of several places, including Tibotec Pharmaceuticals Ltd., a subsidiary of Johnson & Johnson, which opened its expanded access program for its investigational protease inhibitor, TMC114, in the U.S. last week. TMC114 - one of two HIV drugs in the company's hopper - boosted with low-dose ritonavir, is in Phase III trials in both treatment-experienced and treatment-naïve HIV-1 patients. The company anticipates filing a new drug application early next year.

"Let's say Tibotec's compounds are the preferred second-line therapy," McDonald said. "Why doesn't Gilead just make a joint venture with them? That's exactly what I think they will do. Viread is already used in some second-line combinations. [Gilead can] combine Truvada with the best second-line therapy that complements it."

Another possibility is Panacos Pharmaceuticals Inc.'s PA-457, which recently yielded Phase IIa results that sent the firm's stock up by 45 percent and this month helped the company price a public offering of 8.25 million shares, raising $86.6 million. Daily oral PA-457 works through maturation inhibition, which occurs at the end of the virus life cycle as newly formed HIV matures into infectious virus particles.

"Could it be used a second line, and in combination with other classes? Absolutely," McDonald said. "Would it be used in first line? My guess is no. If you start throwing these new agents in the cocktail when it's not necessary, you're just asking for [resistance] trouble down the road."

Most exciting to investors now are new mechanisms of action, such as inhibiting CCR5, as a Phase I compound from Human Genome Sciences Inc. is designed to do. In July, Pfizer Inc. offered "really impressive results" from Phase I/IIa studies with maraviroc, its CCR5 antagonist. GSK, though, last week disclosed it was terminating patient enrollment into Phase III studies with its CCR5 compound aplaviroc due to liver toxicities and "people speculate as to whether that's a class effect," McDonald noted. Too early to tell.

In any case, Gilead surely is watching for opportunities. The company's alertness paid off with the $464 million buyout of Triangle Pharmaceuticals Inc. in 2002, the merger that gave the company Emtriva, which was approved in July of the following year. That deal "was probably one of the greatest acquisitions in biotech history," McDonald said. "It enabled Gilead to get to the position where they are now."

GSK, he added, "blew it. If they had bought [Triangle], they would have continued to be the dominant force in HIV, and we wouldn't be talking about Gilead like we are now. I don't think they were paying attention. A problem with big companies is that they [often] don't have their eye on the ball. Gilead does their work."

Importantly, that work includes the COMET study evaluating once-daily Truvada against twice-daily Combivir, interim data from which will be presented at the European AIDS Clinical Society meeting in November and at the Interscience Conference on Antimicrobial Agents and Chemotherapy meeting in December.

"We expect these data to drive switching rates and continued growth for the HIV franchise," McDonald wrote in a
research note.

Among the fruits of that work that already have ripened are preliminary, 48-week data from Gilead's Study 934, designed to compare a regimen of Viread, Emtriva and BMS' Sustiva to Combivir and Sustiva in treatment-naïve HIV patients. Results from analysis of 487 patients, disclosed in February, show a statistically significant difference favoring Viread/Emtriva in the percentage of patients who achieved and maintained HIV RNA less than 400 copies/mL at 48 weeks, based on the FDA time to loss of virologic response algorithm.

"That 48-week data have not yet been incorporated into the label, and they've got a March 9 PDUFA date," McDonald said. "Right now, if a doctor asks a sales rep which is better, Combivir or Truvada, the sales rep can't say, 'Definitely, Truvada.' But come March 9, they will."