Biotech company Gilead Sciences (GILD Quote - Cramer on GILD - Stock Picks) said late Friday that U.S. drug regulators approved its new HIV drug, Viread.
When taken with other antiretroviral drugs, Viread is able to significantly reduce a patient's levels of HIV. Most significantly, Viread was tested on, and is successful in, patients who have failed to respond to other HIV drugs.
Viread is a taken as a once-a-day pill. Foster City, Calif.-based Gilead says the new drug will be on pharmacy shelves within days.
There was little surprise to Friday's decision by the Food and Drug Administration to approve Viread. The drug passed muster with an FDA advisory panel in early October, and at the time, regulators praised the drug for its effectiveness in helping patients who had developed resistance to other HIV drugs.
But the FDA did give Gilead a bit of an unexpected boost by allowing the company to market Viread to all AIDS patients, and not just those who are failing other treatments. The FDA advisory panel, while recommending Viread's approval, also voted to restrict its use to drug-resistant patients only.
Gilead is currently conducting a study to prove Viread's benefit in so-called antiretroviral na¿ve patients, or patients who are just starting HIV therapies. Results from this trial will be ready in the first half of next year, the company says. Gilead is also studying Viread's use in HIV-positive children.
"The availability of Viread marks an important advance for people living with HIV disease in the U.S.," said John Martin, president and CEO of Gilead Sciences, in a statement.
Viread's approval is certainly great news for Gilead, which suffered a big setback two years ago when another of its experimental AIDS drugs was rejected by regulators because of safety problems. But Gilead's stock has been on a wild upswing for weeks in anticipation of Viread's approval, and at these prices, looks to be a bit on the expensive side.
Gilead closed Friday at $67.68, just off its 52-week high of $70.19 set on Oct. 26. The company's shares have jumped 37% since Sept. 25, the day Gilead released the latest Viread test results and investors began focusing on the drug's approval.
Viread is expected to generate peak annual sales in the range of $300 million to $500 million, depending on which Wall Street analyst forecast you believe. But Gilead is not expected to reach profitability until 2003.
Sales of Viread, combined with sales of existing products, are expected to generate total revenue of $209 million for Gilead in 2002, growing to $338 million in 2003, according to Thomson Financial/First Call. With a current market value of $6.4 billion, Gilead trades at an expensive 30 times current-year sales, and 19 times 2002 sales.
Adam Feuerstein
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