Date: 25 January 2011
Source:  www.bloomberg.com

Gilead Sciences Inc., the world`s largest maker of AIDS drugs, said U.S. regulators didn`t accept an application for a combination AIDS pill pairing Gilead`s Truvada with Johnson & Johnson`s experimental drug TMC278.

The Food and Drug Administration asked for additional information about the chemistry and manufacturing of the proposed once-daily drug, the Foster City, California-based company said today in a statement. Regulators want to know more about an impurity the company found while testing the product, said Norbert Bischofberger, Gilead`s executive vice president for research and development and chief scientific officer.

Gilead has been trying to develop new drugs because it faces generic competition for its three top-selling AIDS treatments starting in 2018. While the FDA action may delay the new pill, investors had low expectations for it, said Jason Kantor, an analyst for RBC Capital markets in San Francisco.

Wall Street had heavily discounted this program so the actual impact to Gilead particularly in 2011 should be pretty small,” Kantor said in a telephone interview. “I don`t think it changes the long-term program at all for this drug. This should be something they can straighten out.”

Gilead declined 76 cents, or 2 percent, to $37.40 at 5:57 p.m. New York time in extended trading after falling 15 cents to $38.16 at the close of Nasdaq Stock Market composite trading.

`Degradation Product`

During testing of the new combination pill, Gilead discovered a “degradation product” was present in the drug at a level that required it to be evaluated, Bischofberger said during a conference call with analysts. “The impurities have to be qualified to be sure they don`t pose a risk,” he said.

Gilead will provide the requested information to the FDA by the end of March, the company said in the statement.

Because the FDA had originally agreed to complete a priority review of the drug in six months, the agency decided not to accept the application so the clock wouldn`t start ticking, Bischofberger said

“I am confident this will result in only a minor delay in bringing this important new treatment to patients,” John Martin, Gilead`s chief executive officer, said during the conference call.

J&J`s Tibotec unit submitted a marketing application to the FDA for TCM278 after conducting two large clinical trials, Gilead said in the statement. The application for the Truvada- TCM278 combination was supported by a bioequivalence study showing that the drugs together reached the same levels in the bloodstream as each drug separately, Gilead said.

First-Line Treatment

Truvada, a two-drug combination, forms the base of all first-line AIDS regimens recommended by the U.S. Department of Health and Human Services. Combining Truvada with TMC278 would make a three-drug combination that`s an alternative to Gilead`s Atripla, its best-selling AIDS drug that is also a
triple-drug medicine.

In the new combination, TMC278 replaces Sustiva, Bristol- Myers Squibb Co.`s drug in Atripla. For Gilead, a TMC278 combination pill may attract customers seeking to avoid Atripla`s side effects, and the company would pay J&J less than it pays New York-based Bristol-Myers for Sustiva.

Research presented in July at the International AIDS Conference in Vienna showed TMC278 suppressed the AIDS virus as well as Sustiva, according to Michael Saag at the University of Alabama at Birmingham. The study also showed that Sustiva kept more patients` viruses from rebounding, at 4.8 percent compared with 9 percent for TMC278.

The rate of resurgent infections with TMC278 may be viewed as a “shortcoming,” Kantor wrote in a July 21 note to investors.

 Keywords: AIDS / Gilead / FDA