The Small Change That's a Big Deal

Gilead Sciences' (NAS: GILD) tenofovir alafenamide fumarate isn't all that different than the company's HIV drug Viread, which goes by the generic name tenofovir disoproxil fumarate.

Most of the time, these me-too drugs never reach the potential of their parent molecules. Pfizer's (NYS: PFE) Pristiq hasn't lived up to the potential suggested by Effexor, the blockbuster molecule it's based on. Ditto for Johnson & Johnson's (NYS: JNJ) Invega, which was supposed to replace Risperdal.

While there was nothing really special about those me-too drugs compared to their now-generic counterparts, Gilead is hoping the small chemical change can have a big enough effect to get doctors to switch to the new drug as Viread faces generic competition in a few years.

The anti-viral specialist doesn't need the new drug, henceforth referred to as TAF, to produce better efficacy than Viread; it just needs a cleaner side-effect profile. Viread has been linked to new onset or worsening of renal impairment and decreased bone mineral density.

In a small phase 2 trial, Gilead tested its new quad pill, Stribild -- which contains Viread -- to TAF plus the three other components of Stribild. The TAF-based regimen caused a smaller reduction in bone mineral density than Viread. The new regimen also had better creatinine clearance, a measure of renal function, compared to Stribild. Efficacy was comparable across the treatment arms.

Swapping out Viread as a component of Stribild might help increase sales down the road, assuming the phase 3 trial keeps the same safety trend. More importantly, Gilead hopes that doctors will swap Viread out of cross-brand cocktails that also contain drugs from Pfizer, Merck (NYS: MRK) , Abbott Labs (NYS: ABT) , and others. Gilead would like to continue to get a piece of those patients even after Viread sees generic competition.

Gilead is also testing another four-drug combination pill containing TAF, Johnson & Johnson's Prezista, and two other drugs owned by Gilead. Reducing pill burden with an all-in-one pill is the future of HIV treatment, and lower side effects that TAF produces should make it easier to compete.

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