Gilead nears EU approval for the next big thing in hep C

Gilead Sciences ($GILD), already a trailblazer in hepatitis C treatment, is creeping up on its next milestone: approval for a combination therapy that promises to cure the majority of patients without the need for painful injections.

The European Medicines Agency has recommended continental approval for Gilead's new drug, which combines NS5B-blocking sofosbuvir, already a blockbuster as Sovaldi, with ledipasvir, an NS5A inhibitor. That recommendation now goes to the European Commission, which typically follows the EMA's guidance and hands down final decisions within about three months.

Meanwhile, Gilead has already filed an FDA application for the treatment, to be marketed as Harvoni, and expects to win approval and launch the drug later this year.

That should put it just ahead of its closest rivals in the race to cash in on next-generation hep C treatments. AbbVie ($ABBV), developing a three-treatment cocktail with similar efficacy, is just a few months behind, filing with the FDA in April and expecting to commercialize its combo by year's end. Bringing up the rear is Merck ($MRK), whose mix of MK-5172 and MK-8742 has charted impressive results in Phase II, leading analysts to pencil the company in for a second-place finish behind Gilead once it makes its way to market.

Gilead's Sovaldi--Courtesy of Gilead

Gilead's combination is expected to bring in nearly $3 billion a year by 2020, sending annual sales of Sovaldi--already the fastest-growing drug of all time--north of $7 billion.

With regulatory approvals all but assured, Gilead's next hurdle will come in pricing. Sovaldi's cost, $84,000 for a 12-week regimen--nearly incited a payer revolt, and how the company chooses to price its next-gen combo will be closely watched.

Meanwhile, on the R&D side, the titans of hep C treatments are already focusing on the next frontier of treating the virus. Bristol-Myers Squibb ($BMY) has kicked off a study to determine whether a combination of its own daclatasvir and asunaprevir with Sovaldi can cure patients in as little as four weeks. Merck splurged $3.9 billion on Idenix Pharmaceuticals in June to get its hands on some assets that, combined with its in-house treatments, could do the same. And Gilead, looking to protect its lead, is researching a four-week program of its own.

- read the statement

Special Report: The top 15 late-stage blockbusters in the pipeline - Ledipasvir/Sofosbuvir, Gilead Sciences