Date: 13 July 2011
Source: The Wall Street Journal
Link: http://online.wsj.com/article/SB10001424052702304447804576413933613870522.html?mod=googlenews_wsj

Gilead Sciences Inc. and Johnson & Johnson agreed to develop a new combination HIV drug, and are in talks to further expand their partnership on drugs for the virus.

The companies plan to develop a single-tablet combination of J&J`s Prezista drug with Gilead`s experimental drug cobicistat.

Prezista, which has been on the market since 2006, is a so-called protease inhibitor designed to treat HIV infection and is taken with the drug Norvir, in combination with other antiretroviral agents.

Gilead has been testing cobicistat as a "boosting agent" to enhance the effects of certain other HIV drugs. The companies plan to combine Prezista with cobicistat in a single table that can be taken once daily.

J&J will be responsible for the combination drug world-wide. Gilead will retain sole rights to manufacture, develop and commercialize cobicistat as a stand-alone product.

Gilead will receive a flat royalty as a percentage of net sales of the combination product, if it reaches market, minus the supply price of the cobicistat active ingredient contained in those net sales, said a company spokeswoman.

In addition, J&J and Gilead are negotiating terms for the development and commercialization of a single-tablet regimen combining several components: Prezista, Gilead`s Emtriva and Gilead`s experimental drugs GS 7340 and cobicistat.

Piper Jaffray analysts said the new deal was a modest positive for J&J as it builds a franchise in HIV medications. They said it is difficult, however, to assess the financial impact on J&J until the  negotiations on the single-tablet regimen are complete and terms are disclosed.

For Gilead, the deal further extends the company`s dominance in HIV therapies, according to Lazard Capital Markets analyst Joel Sendek. Gilead`s HIV drug Atripla had sales of $2.93 billion for 2010, while Truvada sales were $2.65 billion.

The moves would expand a partnership between J&J and Gilead formed in 2009. Under that deal, the companies developed a combination of Gilead`s Truvada HIV drug and J&J`s Edurant.

Earlier this year, Gilead resubmitted an application for Food and Drug Administration approval of the Truvada-Edurant combination, after the FDA said the initial application didn`t contain sufficient information. An FDA decision is expected by mid-August. The FDA approved Edurant as a stand-alone drug in May.