Gilead Buys Triangle; Viread/Coviracil Fixed-Dose Combo Launch Set For 2005

Gilead Sciences expects to launch a Viread / Coviracil fixed-dose combination treatment for HIV by 2005 following its acquisition of Coviracil developer Triangle Pharmaceuticals.

"We will immediately initiate development of a co-formulation of Viread and Coviracil as a potential fixed-combination treatment for patients with HIV," Gilead CEO John Martin, PhD, said on a Dec. 4 conference call announcing the merger.

Gilead believes it can launch the combination product by 2005. "The path to registration for the co-formulated product is rapid and very straightforward," Exec VP-R&D Norbert Bischofberger, PhD, maintained.

"You have to do co-formulation work - show that the two components are stable when co-formulated in a pill - and then all that's required on the clinical side is a bioequivalence study, and that you can do in four weeks or so," he told analysts.

Gilead is basing its assumptions of what would be expected by FDA on GlaxoSmithKline's Combivir (lamivudine/zidovudine). "If you look at the package insert for Combivir, there's not a lot of information on the co-formulated product," Bischofberger noted.

"There is only [chemistry, manufacturing & controls] information. The clinical information that's contained there is really use of AZT and 3TC separately in HIV patients," he added. "Based on the physical chemical properties of both components, we don't anticipate that there would be any big challenges in doing that."

Gilead believes that Viread (tenofovir) and Coviracil (emtricitabine) are "highly complementary," Martin said. Like Viread, Coviracil is a "potent, reverse transcriptase inhibitor, dosed as one pill, once a day," with "no overlapping mutations."

Combivir and Viread "could result in the first combination product dosed as one pill, once-daily," Martin said. From a commercial outlook, "the message of once-daily therapy is very powerful right now," CFO John Milligan, PhD, added, and "we'll augment our sales force's ability to sell both." Gilead's 62 sales reps will detail Coviracil upon launch.

GlaxoSmithKline's Combivirand Trizivir (abacavir/ lamivudine/zidovudine) are both dosed twice daily. GSK's Epivir (lamivudine) is approved for once-daily, but Gilead does not expect it to be competitive. "The drug launch didn't seem to happen," Milligan said. "In our estimation, doctors don't really know about it."

Triangle filed an NDA for Coviracil in the treatment of HIV in November; the user fee deadline is Sept. 4, 2003. The nucleoside reverse transcriptase inhibitor is also in Phase III trials for hepatitis B, and combination studies with Gilead's Hepsera (adefovir) are underway (¹ (Also see "Gilead Adefovir Hep B Resistance Potential Shows Need For Combo Trials" - Pink Sheet, 12 Aug, 2002.), p. 5).

Gilead expects to file an NDA for hepatitis B in late 2004 in the U.S.; an HIV filing in Europe is slated for earlier that year, the company said.

Triangle has been without a Coviracil partner since July, when Abbott backed out of a 1999 agreement. The $355 mil. deal included rights to Coviracil for HIV and HPV, as well as the antivirals amdoxovir and clevudine (² (Also see "Triangle Coviracil NDA Slated For September; Abbott Bows Out As Partner" - Pink Sheet, 12 Aug, 2002.), p. 33).

Gilead's $464 mil. purchase price means that the company is buying the entire company for approximately $100 mil. more than the Abbott deal. Under the cash tender offer, Gilead will pay $6 per share for Triangle's 76.9 mil. outstanding shares.

The announcement was well-received by investors; Triangle's stock jumped 29% on the news, to close at $5.82, and Gilead's price increased 2% to $37.61. Both Triangle and Gilead ended November on an upswing, up 38.5% and 13.5%, respectively. Both stocks outperformed the F-D-C "OTC" Index of pharmaceutical stocks, which was up 2.9% in November.

Gilead's purchase price includes a $50 mil. interim loan to Triangle for working capital, up to $30 mil. of which may not need to be repayed. Gilead expects the acquisition to close in the first half of 2003. The deal is expected to be dilutive to earnings in 2003, neutral in 2004 and accretive in 2005.

Gilead will be obligated to pay Abbott a 1% royalty on the first $200 mil. in single-agent Coviracil sales, under the agreement that ended the partnership.