A New Generation Of Novel HIV Small-Molecule Antivirals

by: BZ Equity Research

The next generation of novel small-molecule antivirals are being developed.

These drugs carry the potential to create safer and more effective HIV therapies than ever before.

Likelihood of clinical trial success remains uncertain for all four drug candidates.

It is prudent to invest in all four drug companies but asset allocation depends largely on an individual risk tolerance and reward potential.



HIV therapeutics have undergone a substantial evolution since its inception over three decades ago. From the first controversial FDA-approved drug, Retrovir (AZT) to today's newest life-saving combination antiretroviral therapies, HIV therapy has seen incredible progress. Despite such progress, however, there is still considerable research and work that needs to be done in the field. HIV's ability to conceal itself in inaccessible viral reservoirs and its ability to outclass even the most sophisticated antiretroviral combinations have remained key obstacles to effective and long-term viral control. New research has led Gilead Sciences Inc. (GILD), ViiV Healthcare (GSK, PFE, OTCPK:SGIOF), Abivax SA (OTCPK:AAVXF), and Biotron, Ltd. (OTCPK:BITRF) down different paths of small-molecule HIV antiviral development. They believe that their novel compounds, targeting previously untouched viral proteins will play a crucial role in the development of the next generation of antiretroviral therapy for HIV.

HIV, AZT, and cART

In the early 1980s, researchers began scrambling to find clues as to what was causing a mysterious new illness that was devastating the immune systems of young gay men. What began in 1981 with only 270 reported cases of AIDS quickly escalated into a full-blown pandemic as the Human Immunodeficiency Virus (HIV) spread like wide-fire across the globe. With no cure or vaccine in sight and a mounting death toll from AIDS, there was an urgent need to contain the spread of the virus and to help those living with the disease. The first glimmer of hope came in 1987 when FDA finally approved the first antiretroviral drug for HIV.

Upon FDA approval, AZT, a nucleoside reverse transcriptase inhibitor (NUC) branded as Retrovir, became an instant sensation with HIV and AIDS patients who were desperate for any form of therapy for their ailment. Although it was not a cure for HIV or AIDS, it promised to safely stop the viral replication process and give patients an extension on their life expectancy. The urgency for the drug was so severe that the FDA granted Burroughs Wellcome the opportunity to push their drug through the last phase clinical trials for 'ethical' reasons. Facing mounting pressure from patients, advocacy groups, and parts of the federal government, the FDA approved AZT after just 20 months in clinical trials.

The haste decision to approve Retrovir was initially met with worldwide praise but as it turned out, the drug was not as safe and effective as initially thought. Although the clinical trials indicated that the drug was relatively safe for use, led to an increase in CD4 cell counts, and produced a significantly lower mortality rate than the placebo, real-world patient experience, and subsequent large-volume European drug trials indicated that the drug was in fact associated with a high degree of toxicity and long-term ineffectiveness. Eventually, patients on a course of AZT began to worsen as their CD4 counts decreased and side effects began to take hold. Reports of viral mutations allowed the virus to resist the drug's therapeutic effects, rending it useless for many patients. Other approved NUCs for HIV treatment at that time also failed to provide long-term efficacy against the disease.

It wasn't until 1996 that a truly effective HIV treatment regimen came on the scene. Originally called "Highly Active Antiretroviral Therapy" (HAART), researchers at the New England Journal of Medicine found that by combining multiple NUC agents with another antiviral class, namely protease inhibitors, patients were not only able to achieve undetectable HIV-1 RNA but also maintain durable long-term viral suppression. The use of this combination therapy, later renamed "Combination Antiretroviral Therapy" (cART), transformed HIV from a death sentence to a manageable chronic disease as it significantly increased the life expectancy and lowered the likelihood of AIDS development, death, and hospitalization for HIV patients.

The incredible success of this three-drug cocktail had sparked an interest in the development of other drug combinations and a search for new classes of antivirals for HIV. Since cART's clinical inception, novel antiviral drug classes such as integrase inhibitors, non-nucleoside transcriptase inhibitors, and entry/fusion inhibitors have been approved and integrated into the multi-drug therapeutic regimen. The ability to mix-and-match various antiviral drug classes created safer and more effective HIV therapies than ever before.

An illustration of the structure of HIV, with identified proteins labeled. Credit: David S. Goodsell, RCSB PDB http://www.pdb.org

Figure 1: HIV and its viral proteins. Source: National Institute of General Medical Studies

In contrast to many other known viruses, HIV has not been shown to be curable via immune response. The body's inability to fight off the virus due to a slow immune response, viral mutations, and elusive viral reservoirs create a situation where life-long antiviral therapy is necessary to control the disease progression. With any long-term antiviral therapy, there is a significant risk of potential drug-resistant viral mutations as well as the development of treatment-related toxicities. Even the latest and safest drug therapies run the risk of therapeutic failure. For this reason, researchers continue their quest to better understand the disease and find new viral targets. While many companies boast about the curative potential of new drug platforms and technologies such as monoclonal antibodies, gene editing, CAR-T therapy, RNAi, and Antisense Oligonucleotides, small-molecule antiviral therapy continues to be the proven gold standard in HIV care. Today's HIV powerhouses ViiV and Gilead Sciences, Inc remain steadfast in continuing their small-molecule research for HIV despite the allure of new biotechnology. Even new small-cap entrants in the field such as Biotron Ltd. and Abivax SA have embraced small-molecule research and are currently seeking to shake things up in the HIV therapeutics market with novel antiviral medicines.

Figure 2: Viral Rebound after cART Cessation. Source: Dr. Chomont, Nicolas. VGTI Florida.

The HIV Behemoths- Old Money and New Targets

In 2017, Gilead Sciences and ViiV Healthcare, a joint venture by GlaxoSmithKline plc., Pfizer Inc., and Shionogi Inc., captured approximately 75% of the $27-billion-a-year global HIV therapeutics market. World-renowned for their research in antiviral medications, these two large drug manufacturers have pioneered the development of some of the safest and most effective HIV medicines which have saved countless lives from succumbing to their disease. Despite the progress and success in the field of HIV medicines, both Drugmakers recognize that there is more work to be done in the field as the virus, in some cases, has been able to elude some of the best HIV medications on the market. Gilead and ViiV continue to test and develop new fixed-dose combinations with existing and experimental antiviral medications in the hopes of pushing drug safety and efficacy to unchartered heights. Their extensive pipelines include not only test compounds for established antiviral classes such as nucleoside reverse transcriptase inhibitors (NUCs) and fusion/entry inhibitors but also first-in-class compounds which seek to inhibit viral proteins that have never been targeted before.

Gilead Sciences' Capsid Inhibitor, GS-CA1

Currently, in preclinical stages of development, Gilead's prototype Capsid Inhibitor GS-CA1 represents a new class of antivirals that holds a lot of promise in the field of HIV research. Interestingly, however, Gilead was not the first Drugmaker to explore the capsid as a potential HIV target. In 2010, Pfizer published a report about its first-in-class capsid inhibitor dubbed PF-3450074. It turned out that Pfizer's capsid inhibitor did not destabilize the HIV capsid but rather stabilized it.

Although Pfizer's ground-breaking work with PF-3450074 ended in failure, it provided a plethora of valuable information about the HIV Capsid and its structure. Gilead Sciences learned from Pfizer's failure and used the knowledge gained from its preclinical work to create a potent new class of capsid inhibitors.

The HIV capsid acts as the virus's plate of armor which protects the viral RNA and enzymes as it travels through the cell's cytoplasm. The capsid then penetrates through the cell's nuclear envelope and unloads its genomic cargo into the nucleus of the cell. Researchers have hypothesized that disrupting the HIV capsid assembly and disassembly could potentially wreak havoc on the life cycle of the virus as it could prevent the capsid from forming and prevent viral DNA entry and integration in the nucleus. Thus, destabilization of the capsid could, in theory, prevent any further proliferation of the virus.

At the 2017 Conference on Retroviruses and Opportunistic Infections, Gilead presented its first findings from preclinical studies conducted on rats which showed that its novel compound GS-CA1 is a highly potent inhibitor of the HIV-1 capsid and the viral replication process. The compound showed antiviral activity for over 10 weeks in the rats and is believed to work as both a therapeutic drug and prophylactic against HIV-1. More importantly, the prototype capsid inhibitor demonstrated efficacy in a mutant form of HIV-1 which is typically resistant to licensed antiretroviral therapies and more potency than other HIV drug currently on the market.

According to researchers, GS-CA1 works in two stages of viral life cycle: capsid assembly and disassembly. By speeding up capsid protein assembly, it prevents the capsid from forming properly. The compound is also believed to inhibit capsid disassembly, preventing the penetration of the nuclear pore complex and the integration of the viral genome into the CD4 cell's DNA.

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Figure 3: GS-CA1 Mode of Action Summary. Source: Tse, Winton C., et al. Conference on Retroviruses and Opportunistic Infections (2017)

Due to its solubility, GS-CA1 can only be administered as injectable. This means that it cannot be used as part of a single-tablet regimen for HIV but rather administered on a monthly or even quarterly basis. The frequency of this dosing regimen coupled with a superior potency can create a potential shift in the way patients are treated. A monthly or quarterly shot alleviate the need to take antiretroviral pills on a daily basis as it is potentially more convenient and can lead to better medical adherence rates.

Gilead expects to file for an IND form with the FDA sometime in 2018. It will be the first time that a capsid inhibitor will be tested on human subjects. Although researchers are optimistic about GS-CA1's potential role in treating and preventing HIV-1 based on rat studies, there is plenty of stringent testing that still needs to be done in clinical trials.

ViiV Healthcare's Maturation Inhibitor GSK3640254

The history of maturation inhibitor research for HIV-1 is lengthy and interesting one that precedes the development of the first capsid inhibitor prototype. The first maturation inhibitor, Bevirimat, was developed by Panacos Pharmaceuticals over 20 years ago. The drug was designed to disrupt the development of the immature gag protein by binding to the CA-SP1 cleavage site. This prevented the immature HIV virion particle from properly developing into an infectious and mature HIV viral particle.

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Figure 4: Maturation Inhibitor Bevirimat and its Mode of Action. Source: McCallister, S., et al. XVII International HIV Drug Resistance Workshop.

Panacos released mixed results from their phase 2b trial in 2007, which showed that the drug worked well for some but not all patients. The company believed that increasing the dosage will result in an increase in efficacy for more of the patient pool. In 2009, Myriad Genetics (MYGN), who had been working on its own HIV maturation inhibitor, Vivecon, bought the rights to Bevirimat from Panacos. However, a year later, Myriad announced that it will be terminating work on both maturation inhibitors as it sought to refocus its efforts on oncology research.

Following the termination of Myriad's HIV maturation inhibitors, Bristol-Myers Squibb (BMY) came on the scene with a series of maturation inhibitors which, unlike Bevirimat, were better suited to tolerate gag polymorphisms. In 2015, Bristol-Myers Squibb had decided to end its research and development of antivirals and sold its HIV assets to GlaxoSmithKline for $350 million. Among the assets were 2 clinical-stage maturation inhibitor candidates BMS-955176 and BMS-986173 as well as a preclinical candidate. In late 2016, GlaxoSmithKline and ViiV Healthcare decided to terminate work on the two clinical candidates due to gastrointestinal toxicities and drug resistance and focus their efforts on the preclinical candidate now known as GSK3640254. ViiV Healthcare is currently conducting phase 1 studies of this third-generation maturation inhibitor, which it hopes to complete by the mid-2018.

Contrary to GS-CA1, GSK3640254 is in an encapsulated form and could potentially be combined with other antiretroviral small-molecule HIV inhibitors into a single fixed-dose combination pill. Despite a series of setbacks with previous generations of maturation inhibitors, ViiV Healthcare hopes to be the first Drugmaker to bring this novel class of therapeutics to the market and offer patients a safer and more effective way to treat their disease.

The New Guys on the HIV Block

The multi-billion dollar HIV market has attracted many newcomers over the years who hoped to develop the latest and greatest classes of therapeutic medicines and vaccines. While some new entrants inevitably crashed and burned, the lucky ones either grew with their success or were acquired by bigger fish. Today, there is a large group of biotech companies with promising technologies and a desire to grab a sizable chunk of the $27-billion-a-year HIV market. Among the new guys are two obscure foreign nano-cap companies who believe that they hold the key to combating the final frontier of HIV therapy, the elusive latent viral reservoirs.

Abivax SA's Rev Inhibitor, ABX464

French startup Abivax SA is small biotech focusing on the development of antiviral medicines, immune-enhancing drugs, and polyclonal antibodies for various antiviral applications. Their lead antiviral candidate and perhaps one of the most significant assets in their pipeline is a small molecule known as ABX464. Currently in phase 2, ABX464 is a first-in-class small-molecule which specifically targets the HIV rev protein.

The rev protein regulates HIV gene expression by facilitating the export of viral mRNA from the nucleus to the cytoplasm. Normally, cells do not allow for the export of unspliced mRNA into the cytoplasm due to nuclear retention. However, the HIV-1 replication cycle depends upon the nuclear export and translation of unspliced mRNA, incompletely spliced mRNA, and fully spliced mRNA and has developed a way to overcome the cell's nuclear retention mechanism. The replication of the HIV-1 virus requires unspliced mRNA for exporting genomic RNA, incompletely spliced mRNA for the assembly of viral structural proteins (gag, pol, env proteins), and completely spliced mRNA for the translation into regulatory proteins (tat, rev, nef, vif, vpr, and vpu) in the cytoplasm.

In order to increase the amount of the genomic RNA that enters the cytoplasm and exported to noninfected immune cells, the rev protein will need to facilitate the export of the mRNA prior to any splicing in the nucleus. Furthermore, in order to increase the number of structural viral proteins such as the capsid, reverse transcriptase, and the outer glycoprotein envelope, the rev is required to export the mRNA before it can be completely spliced. The export of fully spliced mRNA, which allows for the translation of regulatory proteins in the cytoplasm is not rev-dependent. However, by decreasing the amount of spliced mRNA, rev effectively increases the amount of structural proteins and genomic RNA while depressing regulatory protein levels in the cytoplasm.

Inside, the nucleus, the rev protein binds to the rev response element (RRE) and exportin protein, which collectively facilitate the export of viral mRNA to the cytoplasm. Following the trafficking of the viral mRNA to the cytoplasm, the rev protein binds to an importin protein and returns to nucleus, where it will once again facilitate the export of new viral mRNA. Properly maintaining the delicate balance of viral gene quantities is essential to the replication cycle of the virus. Thus, the rev plays a key role in maintaining that balance and is an ideal target for antiviral medicines such as ABX464.


Figure 5: Rev Protein Mechanism of Action. Source: Harrington, Mike. University of Alberta. Department of Biology

Abivax believes that ABX464 works by binding to the rev and inhibiting it from exporting unspliced or incompletely spliced mRNA to the cytoplasm. By preventing the export of the immature mRNA, the cell's spliceosome will splice the viral mRNA. By completely splicing the viral mRNA, the drug inhibits the creation of essential viral structural proteins and genomic RNA copies. The company also hypothesizes that this splicing will lead to aberrant mature small viral mRNAs, which will be translated into small peptides and trigger an effective immune response to destroy the infected cell and pockets of latent HIV reservoirs. ABIVAX image

Figure 6: ABX464 Monotherapy Versus Triple Therapy cART HBV RNA Reduction in Mice. Source: Abivax SA

Although it's exact mechanism of action is still up for debate, Abivax has successfully demonstrated superior off-treatment efficacy and long-term HIV RNA control over approved cART therapy (3TC, TDF, and RGV) in mice studies. Although the on-treatment HIV RNA levels decreased gradually on ABX464 monotherapy, the off-therapy HIV RNA was not observed to have rebounded to pre-treatment levels. However, the mice which received the combination antiretroviral therapy saw an immediate and significant on-therapy viral load reduction but experienced a rebound of HIV RNA levels to pre-therapy levels.

The results from Abivax's phase 2a trials, which explored the efficacy of ABX464 on the HIV viral reservoir, had shown a 25% to 50% reduction in 8 out of 15 patients versus no reductions in the placebo group. Following the completion of the phase 2a trial, the company launched a compartmental pharmacokinetics clinical study in March 2017 to determine whether the drug is more effective when taken for longer periods of time. The shorter duration cohort saw up to a 50% serum HIV RNA reduction in 8 out of 9 patients. Results from the extended treatment duration cohort are not yet available. The results of the study will guide the company on the design of the phase 2b trials slated to begin Q4 2018.

Biotron Ltd.'s Vpu Inhibitor, BIT225

Biotron Ltd. is yet another important yet relatively unknown player in HIV research. With a focus on combating latent HIV reservoirs, the company believes that its first-in-class vpu inhibitor BIT225 can sound death knell to the incurable disease.

The vpu is an accessory HIV-1 regulatory protein which has been found to degrade an infected immune cell's CD4 receptors (an important biomarker for disease progression and extent as well as the site of viral entry), enhance virion release by downregulating tetherin/BST-2 and opening ion channels in cell membranes, and inhibiting natural killer (NK) and natural killer T-cell (NKT) mediated killing by trapping NTB-A and CD1d glycoprotein receptors, respectively, in intracellular compartments and away from the cellular surface. Although vpu plays many roles in the life cycle of HIV, it has been found that Biotron's BIT225 serves as a specific inhibitor of vpu's viroporin mechanism. A recent study by Kuhl et al. has found that BIT225 works by targeting vpu's ability to form permeable hydrophilic pores in cellular membranes and thus enhancing the release of viral particles from the infected cell. The study also found that the BIT225's antiviral activities were more pronounced in myeloid-lineage cells than CD4+ lymphocytes and prevented viral transfer from myeloid-derived dendritic cells (MDDC) to CD4+ T-Cells. Another study by Khoury et al. found that BIT225 also inhibit virion release from HIV-infected macrophages.

While current antiretroviral therapy works efficiency against disease progression in CD4+ lymphocytes, they have been unable to successfully target latent viral reservoirs located in myeloid-lineage cells (monocytes, macrophages, and dendritic cells). With the ability to cross the blood-brain barrier and spread the disease to the central nervous system, myeloid-lineage cells have been able to conceal themselves from traditional medicines and represent the last major battleground in the fight against HIV.

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Figure 7: Viroporin Mechanism of Action in Cells. Source: Nature Reviews Microbiology

Biotron's BIT225 may serve as the key in the fight against inaccessible pockets of HIV. Biotron's phase 1b/2a clinical trials results indicated that in combination with cART, BIT225 successfully reduced HIV RNA, inhibited replication in myeloid -lineage cells, and crossed the blood-brain barrier to reach latent viral reservoirs. With the promise of reaching previously untouched sites of disease, BIT225 may work in combination with today's approved cART medicines to collectively annihilate HIV once and for all. With preparations being made for a phase 2b study, it has yet to be seen just how safe and effective it will be in treating large cohorts of HIV-positive patients.

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Figure 8: Summary of the Effects of a Single Dose of BIT225. Source: Biotron, Ltd.

Risks, Rewards, and Portfolio Allocation

Gilead Sciences' GS-CA1, ViiV Healthcare's GSK3640254, Abivax's ABX464, and Biotron's BIT225 are novel small-molecule which are designed to target viral proteins that have eluded today's complex cART medicines. Each of the four companies mentioned here hopes that by successfully inhibiting the workings of their respective targeted viral proteins, they would be able to offer patients a safer, more convenient, and more effective treatment than ever before. As none of these agents have been tested in late-stage clinical trials, it is too early to predict whether any of these agents hold any real therapeutic promise. However, for any investor who is interested in the promise of better HIV drugs and a $27 billion-a-year market, it would be prudent to diversify their portfolio by allocating funds to all four individual companies. However, deciding how to diversify one's HIV therapeutics portfolio depends largely upon an individual risk tolerance assessment.

Company Stock Ticker Prospective Novel Compound Estimated HIV Therapeutics Market Share Share Price Volatility Investment Risk/Potential Reward for Success of Novel Compound
Gilead Sciences, Inc. GILD GS-CA1 (Capsid Inhibitor) 55% Low Low/Low
ViiV Healthcare (GlaxoSmithKline)


GSK3640254 (Maturation Inhibitor) 23% (ViiV Healthcare) Very Low Low/Medium
Abivax SA


ABX464 (Rev Inhibitor) None

Very High

Very High/Very High
Biotron, Ltd.


BIT225 (Vpu Inhibitor) None Very High Very High/Very High

Table 1: Company Market Share, Share Price Volatility, and Potential Risks and Rewards


Market Capitalization

Current P/E Ratio

Dividend Yield

Free Cash Flow

Gilead Sciences, Inc.

$96 Billion



$11.31 Billion (EOY 2017)

GlaxoSmithKline, plc.

$99.4 Billion



$4.66 Billion (EOY 2017)

Abivax SA

$89.8 Million



$20.1 Million (Q2 2017)

Biotron, Ltd.

$10.2 Million



$1.99 Million (Q2 2017)

Table 2: Company Financials

Investors seeking to play it safe should allocate the majority of their investment into Gilead Sciences and/or GlaxoSmithKline (76.5% majority owner of ViiV Healthcare). Gilead Sciences is the market leader in both HIV therapeutics and non-HIV antiviral medicines. With a large portfolio of approved HIV and non-HIV assets, a great dividend yield, incredibly high cash flow, relatively low P/E ratio, and low share price volatility, it is a very safe bet for anyone seeking to invest in HIV therapeutics. However, Gilead is unlikely to reap high rewards in the event that GS-CA1 succeeds in clinical trials due to the fact that it is already the market leader and top-earner in HIV therapeutics.

ViiV Healthcare, an HIV-focused joint venture by GlaxoSmithKline Plc., Pfizer, and Shionogi, has been steadily building its HIV portfolio with the hopes of dethroning Gilead and its HIV empire. Investing in ViiV is not possible due to its corporate structure. However, those looking to invest in ViiV should consider investing in its majority stakeholder, GlaxoSmithKline. As one of the largest pharmaceutical companies in the world, GlaxoSmithKline is perhaps one of the safest investments in the pharmaceutical industry. With a handsome dividend yield, large market capitalization, very low stock price volatility, and a dizzying list of approved prescription, vaccine, and consumer healthcare assets, GlaxoSmithKline is also a safe and attractive investment for those who seek to invest in a safe. While ViiV Healthcare's drug portfolio represents 23% of the total HIV sales worldwide, acquiring more market share can be accomplished through better drug combination development and the approval of novel medicines such as GSK3640254. With CAGR for HIV therapeutics at 3.7% until 2022 and plenty of market share to steal from Gilead, GlaxoSmithKline has a lot of room for growth in the field especially if GSK3640254 succeeds in clinical trials.

For investors who can stomach high-risk investments for the sake of potentially high rewards, look no further than Abivax SA and Biotron, Ltd. These foreign nano-cap biotech companies trade on the U.S. OTC pink sheets and their respective domestic stock exchanges (Abivax trades on the Euronext and Biotron on the ASX exchange). While these promising companies and their mid-stage clinical HIV compounds appear poised for exponential growth in the event of success, potential investors need to exercise caution when investing in these stocks. With no approved medicines or sources of income, these companies will inevitably have to dilute their shares to raise capital for ongoing clinical trial research and drug development. Furthermore, investors need to consider that both stocks are thinly traded on both their domestic exchanges and OTC pink sheets and with very few assets in their pipeline, are subject to extreme volatility. However, in the event that their prospective HIV compounds show success in clinical trials, the potential rewards for these brave investors can be tremendous.

Disclosure: I am/we are long GILD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.