Gilead's Biktarvy wins megablockbuster HIV nod

But to scale those heights, Gilead will have to contend with GlaxoSmithKline, which has a two-drug combo it's touting as a direct competitor. GSK immediately fought back, slapping Gilead with a patent lawsuit and rolling out new clinical trial plans for a combo of its big-selling Tivicay and Epivir.

In a note Wednesday, Leerink Partners analyst Geoffrey Porges wrote that his team and most investors regarded the Biktarvy approval as a "foregone conclusion" due to the combo's "excellent safety and efficacy" and a data package featuring four successful phase 3 trials. A decision in Europe is expected in the third quarter, according to the analyst.

Now, it's up to Gilead to execute in an HIV market duel with Glaxo. Late last year, GSK's ViiV Healthcare unit won approval for Juluca, which is the first complete treatment regimen containing just two drugs. On Wednesday, GSK reported HIV sales that were up 16% in 2017 to £4.35 billion ($6 billion), driven by market share gains around the world for Triumeq and Tivicay.

Reacting quickly to the Gilead approval, GSK filed a patent lawsuit alleging infringement on bictegravir. The London drugmaker then kicked off a new phase 3 study to examine whether patients on a TAF-based regimen of at least three drugs can switch to a two-drug combo of Tivicay and Epivir and maintain viral suppression.

Glaxo is asking for a jury trial and triple damages to compensate for the infringement. "Gilead’s infringement was deliberate, malicious, consciously wrongful, egregious, and/or in bad faith, rendering this case exceptional and permitting Plaintiffs to seek enhanced damages," the complaint says. The suit stops short of asking for an injunction to block Gilead’s launch, a maneuver that was recently used by Amgen to attempt to thwart Sanofi’s marketing of cholesterol drug Praluent. That injunction, and the patent fight itself, was sent back to trial court and remains pending.

A Gilead spokesperson said the company is "steadfast in our opinion that Biktarvy does not infringe ViiV’s U.S. patent."

Biktarvy has a bit of an advantage in the market duel: It's approved for adults who haven't had antiretroviral treatment at all or for those who have been virologically suppressed on an antiretroviral regimen for at least three months. Juluca's approved for adults who've been virologically suppressed for six months, with no history of treatment failure—but not for patients who've never taken antiretroviral meds.

The HIV faceoff will be important for both drugmakers as each works through its individual challenges. Porges and his team expect the new Gilead drug to bring in blockbuster sales in 2018 and climb all the way to peak sales of $10 billion. Consensus estimates for peak sales are $6.1 billion, Porges wrote in a note following the approval.

The boost couldn't come at a better time for the California biotech. On Tuesday, the drugmaker reported hep C sales guidance of $3.5 billion to $4 billion for 2018, a far cry from the high-flying years of 2015 and 2016. Analysts were looking for $5 billion in hep C sales this year. 

Looking for growth after its hep C downfall, the company recently picked up Kite Pharma in an $11.9 buyout. That acquisition moved Gilead to a leadership position in CAR-T, and the company subsequently won FDA approval for Yescarta.

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