The collaboration between Gilead Sciences ( GILD) and the Tibotec unit of Johnson & Johnson ( JNJ) to develop a new single-pill HIV treatment announced Thursday should boost Gilead's reach and profits in the HIV market it already dominates.

But perhaps just as important, this latest deal protects Gilead's rear flank from generic competition looming in the not-too-distant future.

Gilead's stock price is down 12% this year in part because of persistent investors concerns that billions of dollars in revenue might be lost to cheaper copies of its mainstay HIV drugs starting in 2017.

Gilead shares were up 2.7% to $48.13 in recent trading.

Under the new partnership, Gilead will combine its HIV pill Truvada with J&J's experimental HIV drug TMC278 to create a new, once-daily, single-pill option for HIV patients.

TMC278 is currently in phase III studies and still must be approved by regulators in the U.S. and Europe, so the new combination pill (which has yet to be named) won't likely make its debut until 2011.

Gilead pioneered the single-pill HIV treatment approach when it debuted Atripla in 2006, which combines Truvada with Sustiva, a pill marketed by Bristol-Myers Squibb ( BMY). Atripla sales totaled $1.6 billion in 2008, or about 30% of the company's total product sales.

The new Gilead-J&J pill has the potential to be superior to Atripla because TMC278 data to date suggests the drug has a better safety and tolerability profile than Sustiva, which it will replace.

"One-third of all HIV patients in the U.S. are treated with Atripla, which set a new bar for HIV care. Our number-one priority was to provide patients with another single-tablet option," said Gilead's vice president of commercial operations Kevin Young.

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