The drug: GS-7977
The disease: Hepatitis C
The developer: Gilead
Peak sales potential: Barclays analyst Tony Butler says $3.8 billion

It takes quite a deal to capture everyone's attention in biotech. But when Gilead paid close to $11 billion for Pharmasset, the biotech lived up to the task. Executives were playing with their calculators for days trying to figure how that one needed to perform in order to pay back the buyer.

If Gilead's ($GILD) late-stage program for GS-7977 measures up, though, the payoff will be enormous. After staving off Bristol-Myers Squibb's ($BMY) insistent calls to run a big study that matched GS-7977 with daclatasvir, Gilead sped ahead with a plan to combine the drug--a nuc--with its own NS5A inhibitor, GS-5885. With billions at stake, Gilead will ramp up a confirmatory Phase III study once the data is in from round one. And four late-stage studies of GS-7977 with ribavirin are already under way.

The all-Gilead combo, if successful, would provide a broad range of hep C patients with an all-oral therapy that could be taken in a 12-week course. And the biotech believes that it can stay on track to a 2014 approval--a potential landmark achievement. But one little slip on relapses or some danger signal could burst this bubble in a heartbeat.

Quite a few analysts have been skeptical about Gilead's chances, but a win here would put GS-7977 at the center of the market for new, interferon-free cocktails for hepatitis C.

For more:
Gilead preps late-stage sprint on blockbuster hep C studies
Bristol CEO says Gilead holding out on hep C tie-up
Gilead wows analysts as 7977 combos quell hep C in most patients
Gilead Sciences bags Pharmasset's hep C pipeline in $11B buyout


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