Gilead Announces Encouraging Sovaldi Data - Analyst Blog

Amidst criticisms regarding the high price tag ($84,000 for a 12-week treatment period in the U.S.) associated with its potential blockbuster hepatitis C virus (HCV) infection treatment Sovaldi (sofosbuvir, a nucleotide analog polymerase inhibitor) , Gilead GILD announced encouraging data on the drug in combination with ribavirin (RBV) and pegylated interferon (peg-IFN) from the study GS-US-334-0109.

The open-label, 12-week study evaluated Sovaldi (once a day) in combination with weight-based RBV twice-daily (1,000 or 1,200 mg/day) and peg-IFN (180 μg/week) for treating genotype 1 chronic HCV patients who did not respond favorably to prior therapy with other direct acting antivirals.

Data revealed that the Sovaldi based regimen was effective in treating the patient population. Data (a separate presentation) also supported retreatment with Sovaldi in genotype 2 and 3 HCV patients who had failed treatment by a sofosbuvir-based regimen.

Furthermore, Gilead announced encouraging data from an ongoing phase II study (ELECTRON 2) on its once-daily fixed-dose HCV combination therapy – ledipasvir (NS5A inhibitor) plus Sovaldi with RBV in treatment naïve genotype 3 chronic HCV patients. Data revealed that all patients treated with the combination achieved sustained virologic response 12 weeks after the completion of treatment. The study also evaluated the fixed dose combination without RBV.

We note that the fixed-dose all-oral combination of Sovaldi and ledipasvir is under review in the U.S. and Europe for treating chronic HCV patients with genotype 1 version of the virus.

Data from another ongoing phase II study (GS-US-342-0102) revealed that Sovaldi combined with GS-5816 (a pan-genotype NS5A inhibitor) was effective in treating treatment-naïve, non-cirrhotic patients with genotypes 1-6 HCV infection. Further, it revealed that the combination was well tolerated. Gilead intends to evaluate the combination further.

We note that Sovaldi was approved in the U.S. in Dec 2013 with a broad label. European approval of the drug came in Jan 2014. The drug is off to a strong start. We believe investor focus will be on the performance of Sovaldi in the first quarter of 2014, results of which are expected later this month. Sovaldi is facing competition primarily from Johnson & Johnson's JNJ Olysio in the U.S.

Gilead carries a Zacks Rank # 3 (Hold).  Better-ranked stocks in the healthcare space include Alkermes ALKS and Amgen AMGN. Both stocks carry a Zacks Rank #1 (Strong Buy).