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Analyst Blog

Gilead Sciences Inc. (GILD - Analyst Report) recently initiated the first of two phase III studies on tenofovir alafenamide (TAF). The study (104) is evaluating a single tablet regimen of TAF for treatment-naïve adults suffering from HIV-1 infection. TAF is a prodrug of tenofovir which is the active agent in Gilead’s Viread (tenofovir disoproxil fumarate).

Gilead has designed its phase III study to evaluate a once-daily single tablet regimen of TAF with its HIV drug, Stribild among new HIV patients. The company expects to initiate the second phase III study (111) on the candidate soon.

In Oct 2012, Gilead reported positive top line results from a phase II study on TAF. The study compared TAF single tablet regimen with Stribild. The TAF based regimen demonstrated statistically significant smaller reductions in HIV RNA levels in comparison to Stribild.

We note that in Aug 2012 the US Food and Drug Administration (FDA) approved Gilead’s Stribild as a first-line therapy for treating adults with HIV-1 infection. Stribild is Gilead’s third single tablet regimen for HIV after Truvada and Atripla.

Stribild is a combination of elvitegravir, cobicistat and Truvada. We note that Truvada itself is a combination of Viread and Emtriva. The company is also looking to approve Stribild in the EU.

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 carries a Zacks Rank #4 (Sell). Pharma stocks, which appear to be favorably placed, include Targacept Inc. , Valeant Pharmaceuticals International Inc. (VRX - Analyst Report) and Medivation Inc. (MDVN - Analyst Report). All these companies carry a Zacks Rank #1 (Strong Buy).