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Tivicay, approved in August, is a new pill for the treatment of HIV-1 infections from Viiv Healthcare. Analysts see it as a potential blockbuster by 2017, a drug that will give competition to some of the best-selling single-agent and combination products in the industry.

Viiv Healthcare is a development partnership between GlaxoSmithKline (NYSE:GSK), Pfizer (NYSE:PFE) and Shionogi, with Glaxo having a 76.5 percent majority in it.

Stribild, approved in August 2012, from industry leader Gilead Sciences' (GILD), combines four HIV treatments into one: the experimental integrase inhibitor elvitegravir and a boosting agent, cobicistat with two other drugs already approved in Gilead's pill Truvada.

The new drug shakes up the competition somewhat but for now it doesn't hurt Gilead's leading position in the HIV treatment market too much. For years Gilead has been the number one player in the AIDs market, building a blockbuster HIV franchise primarily with drugs from its own pipeline.

Tivicay

Tivicay interferes with one of the enzymes necessary for HIV to multiply. It is a once-a-day pill to be taken in combination with other antiretroviral drugs.

Tivicay can be used both by HIV-infected adults who are new to treatment and previously treated patients. It is also approved for children ages 12 years and older.

Tivicay is an integrase inhibitor for HIV, originally developed by Shionogi and now fully licensed to GSK's HIV unit ViiV Healthcare. Shionogi will earn mid teens royalties from the deal as well as own 10 percent of ViiV.

Integrase inhibitors are a class of antiretroviral drug designed to block the action of integrase, a viral enzyme that inserts the viral genome into the DNA of the host cell.

Tivicay was tested in four clinical trials involving 2,539 participants, plus one trial for HIV-infected children ages 12 years and older.

The Phase 3 study SPRING-2 showed it was non-inferior to Merck's (NYSE:MRK) Isentress, not a spectacular achievement but a good performance for a once-a-day pill.

Important results came from the VIKING 3 trial that showed the new drug effective in patients insensitive to Isentress and Gilead's elvitegravir.

The Phase 3 SAILING study also showed the drug was superior to Isentress as a 2nd line treatment of HIV.

SINGLE was a study evaluating once-daily Tivicay plus abacavir/lamivudine versus the single tablet regimen Atripla (made by Gilead) in 833 HIV-infected, new-to-treatment patients.

Tivicay blocked all signs of the virus in 88 percent of the patients after 48 weeks, compared to 81 percent for Gilead's Atripla.

This difference was statistically significant. Also, 2 percent of the patients on the Tivicay-based regimen dropped out of the trial due to adverse events versus 10 percent of those receiving Atripla, which may suggest that Tivicay's side effects are more tolerable.

GSK and Pfizer set up the joint venture ViiV Healthcare three years ago, with both committing HIV/AIDS assets to the venture in an attempt to counterbalance the weight of market leader Gilead.

In 2012 ViiV Healthcare's products held a market share of approximately 12 percent of the global HIV market, still a minor second position behind Gilead's 46 percent.

Analysts think that at some point ViiV will be turned into an independent company, offering a direct challenge to Gilead.

Stribild

Stribild contains four Gilead compounds in a complete once-daily single tablet regimen: elvitegravir 150 mg; cobicistat 150 mg; emtricitabine 200 mg; and tenofovir disoproxil fumarate 300 mg. The last two are already components of Gilead's pill Truvada.

Stribild is approved in the U.S. as a complete regimen for the treatment of HIV-1 infection in adults who are new to treatment. But Stribild is not a cure for HIV-1 infection.

Combination HIV drugs like Stribild are not made for convenience alone. In the HIV life cycle, five classes of antiretroviral medications are identified, each of which inhibits a specific stage of the disease.

Whenever one drug is unable to suppress a certain viral mutation, a combination of three or more active drugs is found to effectively suppress a variety of resistant HIV that can exist within a viral population.

The aim of therapy is to ensure the suppression of HIV to so-called "undetectable" levels, meaning that while the virus is not fully eradicated, it is beneath detection levels of current testing assays.

Long term study: In October Gilead announced results from a three-year (144-week) efficacy and safety results from two Phase 3 studies (Studies 102 and 103) evaluating Stribild among new-to-treatment patients with HIV-1 infection.

After three years of treatment, Stribild demonstrated comparable efficacy to two standard-of-care HIV regimens, Atripla in Study 102 and Truvada in Study 103. These data were presented at the EACS (European AIDS Clinical Society Conference) in Brussels, Belgium.

Data from the study 102 revealed that Stribild was non-inferior to Atripla after 144 weeks of treatment. Data from the study 103 demonstrated the non-inferiority of Stribild to Norvir -boosted Reyataz plus Truvada after a similar time period. Norvir is made by AbbvVe (NYSE:ABBV) and Reyataz is made by Bristol-Myers Squibb (NYSE:BMY). Both studies are ongoing in a blinded manner.

Price

The wholesale price of Tivicay is $1,175 for 30 pills in the U.S., or $14,105 per year. This is in line with Isentress, another integrase inhibitor, whose wholesale price is $12,976 per annum.

Stribild cost $28,500-a-year.

But the two prices are not comparable because Tivicay is not a complete regimen; it has to be taken in combination with other antivirals. In this context it may cost more than Stribild.

Also, patients with resistance to integrase inhibitors, who require twice the daily 50 mg dose, will have to pay twice the amount, or $28,210 per year.

A new fixed dose combination drug, combining Tivicay with Glaxo's Ziagen and Epivir, is currently undergoing Phase 3 trials and what comes out of it may compare favorably in price and efficacy to Atripla or Stribild.

New ideas

Injections: Johnson & Johnson (NYSE:JNJ) and GlaxoSmithKline are now testing a combination injection in people with HIV to see whether it can keep the virus in check for the longer term.

40 healthy volunteers took a combination of Glaxo's GSK744 and J&J's TMC278 and sustained drug levels above a predetermined threshold considered necessary to control HIV, during the trial and for four months after the last shot, according to results presented at the International AIDS Society's meeting in Kuala Lumpur during the summer.

Patients usually prefer pills to needles. However, HIV pills are taken for life. Gilead and others have greatly reduced the number of antiviral drugs patients need to swallow every day. Still many patients would choose injections if it would be sufficient to do it once a month or even less frequently.

One constituent of the experimental combination, J&J's TMC278, also known as Edurant, has been approved in oral form by the FDA since 2011. The other constituent, GSK744, being developed by ViiV Healthcare, is a version of Tivicay.

These kind of shots may one day provide a safer, more convenient treatment option compared to the daily pills.

Vaccine: As a vaccine, quarterly shots may prove useful. Gilead's Truvada pill has been tested as a vaccine and it was proven that it would reduce the chances of uninfected people getting the virus, however in real life the inconvenience and side effects of taking a daily medicine may deter many from using it.

New drugs: Gilead's prodrug (slow release) version of Viread, called tenofovir alafenamid fumarate; and a combination of Prestiza from Johnson & Johnson with three Gilead compounds, Emtriva, cobicistat and the Viread prodrug are in development.

Elvitegravir and cobicistat are components in Stribild but as monotherapies have been disallowed by the FDA due to manufacturing issues, but surely they will be re-submitted.

AbbVie and Biogen (NASDAQ:BIIB) both have monoclonal antibodies in Phase 2, and more speculative gene and cell therapies are also being studied.

Rapid diagnostic test: In August the FDA approved the first rapid test for the simultaneous detection of HIV-1 p24 antigen as well as antibodies to both HIV-1 and HIV-2 in human serum, plasma, and venous or fingerstick whole blood specimens.

Detection of HIV-1 antigen permits earlier detection of HIV-1 infection than is possible by testing for HIV-1 antibodies alone. The test is made by Israeli company Orgenics, part of Alere, Inc.

Market

According to research firm EvaluatePharma, the HIV market will grow for a while and then flatten out.

Total sales of HIV drugs will grow from $17.5 billion in 2012 to $20.6 billion in 2016, where it will peak. EvaluatePharma sees it tapering off to about $18 billion in 2018.

One reason for the projected slowdown, if it happens at all, could be the reduction in the number of new cases. The World Health Organization reports that globally the number of new HIV infections has dropped by 33 percent in 2012 compared to 2001, and AIDs-related deaths have been reduced by 30 percent compared to 2005.

Close to 10 million people in need had access to antiretroviral drugs, but much larger proportion still awaits these medicines for effective HIV treatment and prevention.

Another reason for the slowdown is that the newer drugs provide a good treatment for the disease and its symptoms.

EvaluatePharma projects that only four products will be growing by 2016: Tivicay, Intelence made by J&J, Stribild and Complera, products from Gilead.

The early drugs lost their patent protection and some of the current top sellers will have the same fate in a few years. At some point branded drug sales will start losing momentum and generics will dominate.

But the projection could turn out to be wrong. Unexpected innovations and a bad turn in the disease could rekindle the market.

Investors' summary

Gilead's Stribild generated $57 million in sales in 2012 (partial year as the drug was approved in August) and has sold $191.5 million in the first 6 months of this year.

Gilead leads a list of HIV drugmakers in an annual sales forecast.

According to the forecast the company will sell $9.42 billion worth of HIV drugs in 2014. Second behind Gilead is Johnson & Johnson with $2.44 billion and very close third is Glaxo through its ViiV Healthcare unit, projecting almost the same figure, $2.41 billion.

Gilead is a winner by a large margin, and the margin is widening as time goes by. By 2016 Gilead will own half of all branded sales, selling as much as the next five companies together, according to the forecast.

In the 1980s, an HIV/AIDS diagnosis equaled a death sentence. By now it has been converted into a chronic disease that can be managed with life-long therapy, and the focus is on finding convenient, once-daily treatment options with long-term efficacy and tolerability.

There is just one more thing on the wish list: discovering a cure for AIDs or something very close to it. That should be the ambition of companies that wish to grab market share from the current lineup of established drugs.

Source: Stribild Vs. Tivicay In HIV Drug Race