Gilead shares surge as hep C drug scores a cure for big patient population

Gilead Sciences ($GILD) received its first bonus from the monster $10.8 billion deal to acquire Pharmasset ($VRUS) after CSO Norbert Bischofberger told analysts yesterday evening that PSI-7977 combined with ribavirin cured a group of genotype 1 hepatitis C patients after four weeks of therapy. The analysts already knew that the same treatment had performed well for genotypes 2 and 3, and promising data on the more-common genotype 1 pool added some significant luster to one of the most closely watched programs underway in the industry.

During its quarterly earnings call, Bischofberger told analysts that there were no detectable signs of the hepatitis C virus in patients after they had been taking the oral treatment for close to a month. The data supports Gilead's belief that 7977 is on a fast track to an approval that can swiftly gain blockbuster returns as it races against a bevy of rivals anxious to get to the market with an all-oral regimen that can eliminate the injections now needed to treat patients.

"It looks like Gilead will race ahead and continue to lead because its drug 7977 continues to support potential 100 percent cure rates," RBC Capital Markets' Michael Yee tells Bloomberg. "The data disclosed in genotype 1, an important population for which there was no good data yet, continues to show they can support a multibillion-dollar drug franchise with 7977."

Gilead's shares popped about 5% in overnight trading as word of the data began to spread. Hopes for an all-oral hepatitis C drug have inspired a string of deals in the field. Soon after Gilead acquired Pharmasset, Bristol-Myers Squibb ($BMY) stepped up with a $2.5 billion deal to buy Inhibitex ($INHX), giving it a horse in the big race to the FDA.

- here's the story from Bloomberg
- here's the report from TheStreet

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