Pfizer Inc. (PFE), GlaxoSmithKline plc (ADR) (GSK): Can This HIV Drug Challenge Gilead Sciences, Inc. (GILD)’s Domination?

The company’s latest offering, Stribild for suppressing viral reproduction, approved in August 2012, has yet to make its mark but expected to generate $2.53 billion in revenue in 2016. Complera, another combination drug developed by it in partnership with Johnson & Johnson and approved in 2011, could manage only $342 million in 2012.

Times have changed — the quickening pace of progress in combating an epidemic
Although AIDS is still a serious health challenge, the world community has succeeded to a great extent in bringing down the number of newly infected, mostly due to awareness programs and discovery of new drugs for prophylactic purposes.

According to a 2012 UN report, there were approximately 34 million people with HIV infection across the globe at the end of 2011 — sub-Saharan Africa being the worst affected (4.9% of the population), followed by the Caribbean and Eastern Europe and Central Asia (1%).

The road ahead
According to a report published by EvaluatePharma, the approval of Tivicay may have come at a time that marks the beginning of the end of the era of growth of branded HIV market. According to its research, the market for branded HIV drugs will continue to grow till 2016 to touch $20.59 billion and decline to $18 billion by 2018. Gilead Sciences, Inc. (NASDAQ:GILD)’ combination drugs that have made compliance easier are expected to dominate with 50% share.

Conclusion
One need not lose sleep over the pricing issue. On launch, AIDS activists raised their concerns about pricing of Complera and Stribild as well. Stribild even drew fire from some members of the U.S. Congress. Interestingly, Stribild, priced at more than double of Tivicay, has already raked in $190 million so far in 2013.

However, the success of government and U.N.-sponsored campaigns are likely to lead to a further decline in new patients, more in developed countries, which is where the revenue is more likely to come. Moreover, HIV treatments have improved a lot since the first HIV drug. Success of new treatments like Tivicay depends primarily on whether they have anything more to offer than Gilead Sciences, Inc. (NASDAQ:GILD)’s once-daily single pill — something nearer to a cure or lesser side effects.

The article Can This HIV Drug Challenge Gilead’s Domination? originally appeared on Fool.com and is written by Kanak Kanti, De.

Kanak Kanti De has no position in any stocks mentioned. The Motley Fool recommends Gilead Sciences.

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