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Tickers in this Article: BMY, GILD, JNJ, MRK
Recently, Gilead Sciences, Inc. (GILD) announced that it has filed a marketing application seeking approval for its HIV candidate, elvitegravir, in the US.

The application was submitted to the US Food and Drug Administration (FDA) on the basis of encouraging 96-week data from a phase III study (145). Data from the study revealed that elvitegravir once daily (150 mg or 85 mg) was non-inferior to Merck's (MRK) HIV therapy Isentress (400 mg) twice daily.

We note that the US filing for elvitegravir comes close on the heels of the validation of the candidate's marketing application by the EMA.Positive news from the FDA and the European Medicines Agency (EMA) on elvitegravir would further boost Gilead's HIV portfolio. We remind investors that Gilead has a licensing agreement with Japan Tobacco since March 2005, under which it acquired the worldwide rights (excepting Japan) for elvitegravir.

Elvitegravir is one of the components of Gilead's potential blockbuster HIV combination pill Quad. The other components of the pill are cobicistat and Truvada. Gilead is looking to get the Quad pill (once daily) approved as a first-line therapy for treating adults infected with the HIV virus. The pill is under review in the US with a final decision expected by August 27, 2012. The Quad pill is also under review in the EU, Australia and Canada.

Apart from elvitegravir, another component of the Quad pill - cobicistat- was also in the news recently. Last month, the marketing application of cobicistat was validated by the EMA. Cobicistat acts as a "boosting" agent whose addition causes blood levels of protease inhibitors -- such as Bristol-Myers Squibb Company's (BMY) HIV drug Reyataz and Johnson & Johnson's (JNJ) Prezista -- to increase, thereby enabling the HIV therapy to be dosed once daily. We note that cobicistat only acts as a boosting agent without any antiviral activity. Gilead intends to seek approval from the FDA for cobicistat in the third quarter of 2012.

Our Recommendation

We have a Neutral recommendation on Gilead. Our long-term stance is in line with the Zacks #3 Rank (Hold rating) carried by the company in the short run.
 
 
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