Gilead Sciences Inc. (GILD), the world’s biggest maker of HIV medicines, rose to its highest stock price in 20 years after a combination of its experimental hepatitis C therapies cleared the virus in all of the patients in a trial.
Gilead gained 14 percent to $73.93 at the close in New York, the largest single-day increase since October 2008 and the highest price since the company first offered stock in 1992. Shares have gained 81 percent this year. The Foster City, California based company released clinical trial results over the weekend at a meeting of the American Association for the Study of Liver Diseases in Boston.
Gilead is among several drugmakers competing to develop hepatitis C drugs that act faster with fewer side effects than the current standard of care. Achillion Pharmaceuticals Inc. (ACHN) and Vertex Pharmaceuticals Inc. (VRTX), other developers of hepatitis C therapies, dropped on the news.
Ravi Mehrotra, an analyst with Credit Suisse, lowered his sales and royalties estimates for Vertex’s Incivek for 2013 through 2016 on concern that anticipation of Gilead’s therapy would cause patients to hold off treatment with Vertex’s drug.
“In 2013, given that Gilead’s regimen has the best overall profile (efficacy, safety, convenience), we anticipate a significant amount of warehousing,” he wrote in a research note, referring to patients waiting for treatment.
Achillion, based in New Haven, Connecticut, fell 12 percent to $7.90, its biggest single-day decline in about seven months. Vertex, based in Cambridge, Massachusetts, slid 2.2 percent to $44.
Idenix Pharmaceuticals Inc. (IDIX) rose 12 percent to $4.65 after the company said in a statement Nov. 10 that its evaluation of its experimental hepatitis C drug, IDX184, found “no evidence of severe cardiac findings.” U.S. regulators had placed the medicine on clinical hold last August because of heart failure concerns.
Vertex’s Incivek was approved last year, days after U.S. regulators approved a drug from Whitehouse Station, New Jersey- based Merck & Co. (MRK) They were the first medicines for hepatitis C to win Food and Drug Administration approval in almost a decade.
Gilead spent about $10.8 billion in January to acquire one of its medicines, GS-7977, known as sofosbuvir. The company combined it with GS-5885 as well as the antiviral ribavirin and gave it to 25 patients for 12 weeks. All of the patients, who hadn’t received previous treatments, had undetectable levels of the virus four weeks after they stopped taking the therapies, Gilead said in a Nov. 10 statement.
“This is starting to look like a home run as we now know Gilead at least has a 100 percent cure all-oral regimen with its own wholly owned drug with no partnering,” Michael Yee, an RBC Capital Markets analyst in San Francisco, wrote in a note to clients.
Gilead has begun testing the combination without ribavirin in the third of three trials typically required for U.S. regulatory approval.
“This was the key datapoint that the street was waiting for,” Mark Schoenebaum, an analyst with ISI Group in New York, wrote in a note to clients.
In addition to Vertex and Merck, Gilead is competing with Abbott Laboratories (ABT), Bristol-Myers Squibb Co. (BMY) and Johnson & Johnson to develop a new generation of hepatitis C treatments. Rising deaths among baby boomers from the disease prompted U.S. health officials to declare in May that the entire age group is at risk and should be tested.
Abbott said it will take two different combination therapies for hepatitis C into the final stage of testing, after the new regimens of injection-free treatments showed promising results in a study.
Abbott said in a statement Nov. 10 that an experimental treatment using three drugs, plus a booster call ritonavir, cleared the hepatitis C virus in 87 percent of patients after 12 weeks of therapy. Its other regimen including ribavirin, a standard hepatitis C drug, eliminated the virus in 97 percent.
Gilead’s combo requires fewer pills, “a clear disadvantage” for Abbott, M. Ian Somaiya, an analyst at Piper Jaffray & Co. in New York wrote in a note to clients.
Conventional therapy combines ribavirin with interferon, an injected immune-boosting protein that can cause flu-like side effects, for as long as 48 weeks.
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