The news that a toddler born with HIV infection was "functionally cured" not only holds a lot of promise for biopharmaceutical companies involved in discovery and development of an effective AIDS drug, it is likely to change the direction of AIDS related research.
A two-year old child born in Mississippi was treated with antiretroviral medications from day one of birth. The child is reported to have no detectable levels of the HIV virus despite being off AIDS treatment for more than 10 months now. Being the first well-documented case of an HIV infected child being effectively cured of HIV infection, the medical fraternity is now trying to establish whether the child's experience can be replicated in other children born with HIV infection.
Acquired immunodeficiency syndrome (AIDS) is caused by infection with human immunodeficiency virus (HIV), a retrovirus that infects the immune system. Retrovirus is an RNA virus that replicates in a host cell causing progressive failure of the immune system, which in turn puts the infected person at life risk due to increased susceptibility to opportunistic infections and cancers. There is no cure or vaccine; however, antiretroviral treatment can slow the progress of the disease and allow a near-normal life expectancy.
Until now, there has been only one case of an AIDS patient fully cured of HIV. This was in 2007 in Berlin when an HIV infected patient was given a bone marrow transplant for leukemia. Bone marrow transplants have serious side effects and can be fatal. In this case cure was possible because the donor was immune to HIV virus because of a rare gene mutation that made new white blood cells resistant to the HIV retrovirus.
The Mississippi Baby
In the case of the Mississippi baby, she was born prematurely at 35 weeks in July 2010 to an HIV infected mother who did not know that she was infected and did not receive any antiretroviral treatment or prenatal care. The infant was treated with the standard regimen of FDA approved drugs -fixed dose combination of antiretroviral drugs; lamivudine-zidovudine (trade name: Combivir) and co-formulated lopinavir-ritonavir (trade name: Kaletra).
It needs to be noted here that in this case the baby was given the standard three-drug treatment regimen sooner than it is normally given. The normal procedure is to put babies born to infected mothers on the preventative. Infants are put on the three drug treatment only after that fails. In this case, the child was born in a rural facility where she could not be given preventive treatment and was showing signs of infection 30 hours after birth.
The child was discharged after being treated in the hospital for one week and put on liquid antiretroviral therapy. The infant's viral load started reducing after 29 days of treatment. After 18 months, treatment was discontinued for reasons not known. When the child was examined again by doctors in January 2012, there were no detectable signs of infection in the blood. The child continues to live without antiretroviral treatment.
In Search of a Cure
For quite some time, at least until 2007, GlaxoSmithKline had an enviable position as the undisputed leader of the AIDS drug sector, a position that was successfully challenged. There are numerous antiretroviral drugs available in the market now. A complete list of medications for treating HIV infection, manufacturer name and approval date can be accessed at the FDA website here. Patents of quite a few drugs have expired and generic versions are available. Access a list here.
Gilead Sciences (GILD)
Gilead Sciences is a research based biopharmaceutical company that derives a majority of its revenues from its six marketed antiretroviral products. The company has been working on its long term goal of development of new single table treatment regimens for AIDS. At present, the company offers three single tablet treatment regimens - Stribild (launched 2012) in the U.S., Complera/Eviplera (launched in 2011) and Atripla (launched in 2006).
In 2012, the company submitted marketing applications elvitegravir and cobicistat in the U.S. and Europe. The applications will be up for target review under the Prescription Drug User Fee Act in April 2013. While elvitegravir is an integrase inhibitor for the treatment of HIV-1 infection in adults having already undergone treatment, cobicistat is a boosting agent that increases blood levels to allow once-daily dosing of certain HIV medicines.
Also in 2012, the company obtained FDA approval for its oral once-daily drug, Truvada, the first antiretroviral drug approved for prevention of HIV infection in adults. The company also has tenofovir alafenamide (TAF) in Phase III stage trials after Phase II results showed that it was effective at one-tenth the dose of its earlier drug, tenofovir disoproxil fumarate, marketed under the trade name of Viread.
Gilead Sciences has a market cap of $66.45 billion and at CMP of $43.61 trades at 6.91 times its book value of $6.29. However, price-to-earnings ratio (26.49) is on the higher side, suggesting that the company is slightly overvalued. However, it is a good buy and long term investors can consider buying it at dips.
Bristol-Meyers Squibb (BMY)
Bristol has six HIV drugs in its portfolio, out of which one is in partnership with Gilead Sciences. The company derives most of its revenues from therapeutic drugs in cardiovascular, oncology, neuroscience, immunoscience, metabolic and virology, which includes HIV infection. The company developed Reyataz (atazanavir sulfate), a protease inhibitor, for treatment of HIV virus under license from Novartis (NVS) for which it pays a royalty based on net sales. It is also entitled to use the drug in combination with Norvir (ritonavir) under a non-exclusive license agreement with Abbot Laboratories. Bristol entered into an agreement with Gilead in 2011 for development and commercialization of fixed dose combination of Reyataz and cobicistat, the boosting agent of Gilead Science currently under Phase III trials.
Whereas net sales of Reyataz increased in 2012 due to increase in sale price, net prescription demand decreased by 5%. BMY is valued at $60.27 billion and the stock trades at 4.47 times its book value of $8.32. At CMP the stock is trading at an extremely high P/E of 31.74.
As per UNAIDS and WHO, only 47% of the estimated 14.2 million people eligible for HIV treatment in low and middle income countries were actually accessing ARV (antiretroviral) therapy in 2010. That means that only 6.6 million people were getting treated. The United Nation entities are committed to reach 15 million HIV patients by the year 2015.
The case of the Mississippi baby has the potential to change the scene entirely. The focus, which was earlier on prevention, will now shift towards finding a cure. Most of the space in AIDS treatment is occupied by Gilead and GSK.
Even though GSK has been the undisputed leader in years gone by, it is not primarily an HIV drug company, involved as it is in a vast variety of healthcare consumer products as well as OTC medicines as well.
Gilead and ViiV Healthcare, GSK's 100% focused joint venture with Pfizer for HIV, are two companies that are more likely to come up with an HIV cure.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.