Gilead Faces High Hopes for "Quad" As It Hatches Big Expansion Plan

Gilead (NAS: GILD) will have to clear a high hurdle for its new HIV treatment to meet analysts' expectations. After leaving investors a bit deflated by its first set of pivotal data last month -- which actually hit its goal of demonstrating non-inferiority to its blockbuster Atripla -- the biotech is now slated to deliver a new set of late-stage results for Quad. And once again, analysts will be looking for superior results.

Reuters notes that Quad represents Gilead's big pipeline effort to include an experimental integrase inhibitor -- elvitegravir -- into a single daily pill for HIV. Quad also includes cobicistat with Gilead's Truvada, a combo including the aging HIV therapies Emtriva and Viread. This second pivotal trial will compare Quad's efficacy against a combo that includes Bristol-Myers Squibb's Reyataz and Truvada. And a number of analysts are distinctly skeptical about its chances of demonstrating superiority -- a key measure that will be needed before the treatment can gain ground with doctors and patients.

There's a lot at stake here. Quad will be needed to replace the blockbuster revenue Gilead gets from Atripla. Analysts have offered a range of estimated peak sales, with some reaching above $1.5 billion by 2015.

"While Gilead remains the dominant market leader in HIV ... we believe the overall market trends are slowing and that trends toward earlier treatment have been close to fully realized," noted BMO Capital Markets analyst Jim Birchenough, who was quoted in the Reuters story.

Gilead, meanwhile, is in the midst of executing a complete makeover of the company's headquarters in California. Over the weekend, the San Jose Mercury News reported that the biotech has been angling to expand into a 30-acre site neighboring their corporate campus in Foster City, Calif. The biotech's initial blueprint for expansion called for the company to rip down eight of its 17 buildings and put up new, and much larger, structures as it doubled its 1,700-member workforce. Now city officials are waiting to see how the drug developer will alter its plans to expand lab and office space.

Over the course of the last year Gilead has raised eyebrows around the industry with deals that portend a big expansion of its R&D agenda. Gilead bought Calistoga's cancer technology as it prepares to branch out into new therapeutic disciplines. Last month, CSO Norbert Bischofberger told Bloomberg that the company has a long way to go in boosting what it is spending on cancer research as well as related buyouts and licensing deals.

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