Gilead Shares Rise on Talks of HIV Drug Combination

Gilead Sciences Inc.’s shares rose Monday on news that the company was in talks with rivals to develop a once-daily pill that would combine three powerful HIV drugs.

Analysts said the all-in-one pill would be the first of its kind and would strengthen Gilead’s hand in the HIV drug business. However, Gilead, based in Foster City, Calif., cautioned that many details remained under discussion and that no agreement had been reached.

The pill would include Gilead’s Viread and Bristol-Myers Squibb Co.’s Sustiva, two strong-selling drugs that already form the backbone of one of the most widely used HIV drug cocktails, analysts said.

The third drug in the all-in-one pill would be Gilead’s Emtriva, a year-old product that has had a hard time capturing sales from an older, similar drug sold by GlaxoSmithKline.

“This is the first time that companies have cooperated to develop a single pill,” said Gregory Wade, an analyst with Pacific Growth Equities who owns the stock. “Clearly, this will enhance the further expansion of Viread.”

Gilead’s shares gained $1.87, or 3.4%, to $57.60 in Nasdaq trading on a down day for Wall Street that saw an index of biotech stocks fall 1.5%. Bristol-Myers Squibb was off 23 cents to $25.43 on the New York Stock Exchange.

The drugs from Gilead and Bristol-Myers are among the few once-daily medications available to patients infected with the human immunodeficiency virus, which causes AIDS.

People infected with HIV must follow complicated treatment regimens to prevent the development of full-blown acquired immune deficiency syndrome.

Besides taking drugs to control the AIDS virus, patients must take several other pills to ease complications of powerful HIV medicines and their disease, so there is a high demand for effective, once-daily medications that simplify patients’ regimens.

Also involved in discussions about a possible three-in-one pill is Merck & Co., which markets Sustiva in some foreign markets. Merck shares added 19 cents to $46.64 on the NYSE.

Gilead Chief Financial Officer John Milligan said talks among the companies got started late last year. The intent was to make the combination pill available at no profit in poor nations ravaged by AIDS, he said.

Milligan said the companies were optimistic about reaching an agreement, but it’s not known if it’s technically possible to combine the three drugs into one pill.

An interim approach would be to market the existing pills in a single package, he said.

Viread was Gilead’s bestselling drug in 2003, with sales of $566 million. The company said sales could reach $775 million this year. Emtriva posted sales of $10 million for the six months it was on the market in 2003. Bristol-Myers reported Sustiva sales of $544 million.

Gilead has been working on a once-daily pill that combines Emtriva and Viread. Separately Monday, Gilead said the Food and Drug Administration had granted expedited review of the combination drug and could rule on it by mid-September.

The combination pills are aimed at Glaxo’s Combivir, a twice-daily, two-drug combination pill that has been the world’s bestselling HIV medication, with 2003 sales of $966 million.