Good news flowed in for Gilead Sciences, Inc. (GILD - Free Report) from Europe as the European Commission cleared the company’s potential blockbuster drug Sovaldi (sofosbuvir) as a combination therapy for treating adults suffering from chronic hepatitis C virus (HCV), a major cause of liver cancer and liver transplantation in Europe. The approval of the all-oral HCV treatment in the EU with a broad label does not surprise us as its clearance was recommended by the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) in Nov 2013.
Gilead gained the European approval for Sovaldi on the basis of encouraging data from four phase III studies – NEUTRINO, FISSION, POSITRON and FUSION. Gilead had submitted the marketing application to the EMA in April last year. Moreover, the EMA also considered data from two other phase III studies (VALENCE and PHOTON-1) while assessing the application on an accelerated basis.
The approval of Sovaldi is a big positive for HCV patients as it would not only bring down the duration of therapy to a minimum of 12 weeks but also eliminate/reduce the duration of peg-IFN injections depending on the genotype of the disease. Currently, HCV therapy includes up to 48 weeks of treatment with a regimen inclusive of injectable peg-IFN. Moreover, the current standard of care comes with several side effects, which make it difficult for patients to remain on treatment.
The EC cleared the drug as an all-oral therapy for treating patients affected with genotypes 1, 2, 3, 4, 5 or 6 of the virus. Sovaldi in combination with ribavirin can also be used to treat chronic HCV patients awaiting liver transplantation to prevent the recurrence of the virus after transplant.
The European approval of Sovaldi would not only boost Gilead’s top line but also strengthen its position in the lucrative HCV market. Approximately 9 million people are estimated to be affected by chronic HCV in Europe alone. However, the treated population is much lower. This leaves the field open for new treatments. We expect uptake in Sovaldi sales to be rapid, given its broad label and the pent-up demand for new HCV therapies. Sovaldi, with its high cure rates, a short treatment period and reduction/elimination of the need for interferon injections, has the potential to change the treatment paradigm in the HCV space.
Sovaldi is also approved in the U.S. and Canada. Gilead is also seeking approval of the drug in countries such as Australia, New Zealand, Switzerland and Turkey.
Many companies are targeting the lucrative HCV market. Johnson & Johnson’s (JNJ - Free Report) Olysio in combination with peg-IFN and ribavirin for treating chronic HCV patients was cleared in the U.S. late last year. Moreover, companies such as Bristol-Myers Squibb Company (BMY - Free Report) are developing therapies to combat HCV.
Gilead, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). A better-ranked stock in the biopharma space includes Actelion Ltd. , which carries a Zacks Rank #1 (Strong Buy).