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Premarket Biotech Digest: Harvoni's Label Expansion, AstraZeneca's Tagrisso Approved, KaloBios Winds Down

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Focus Ticker: Gilead Sciences

Last week, Gilead Sciences (NASDAQ:GILD) announced that its Harvoni has been approved by the FDA in new indications. The FDA approved the blockbuster drug for expanded use in patients with genotype 4, 5 and 6 chronic HCV infections and in patients co-infected with HIV.

Genotype 5 and 6 are not very prevalent in the U.S. According to Hepatitis C Online, fewer than 2% of HCV infections in the U.S. involve genotype 5 or 6. Prevalence of genotype 4 is also low in the U.S., accounting for only 1% to 2% of all HCV infections. So the approval of Harvoni in this three genotypes is not likely to have a significant impact on sales. The prevalence of HCV patients co-infected with HIV is much higher. According to data from CDC, about 25% of the HIV-infected persons in the U.S. are also co-infected with HCV.

While the approval of Harvoni in these genotypes is not expected to have a significant impact on sales, it does highlight Gilead's continuing efforts to maintain its dominance in the HCV space. Remember last month the company had submitted Gilead had submitted NDA for fixed-dose combination of sofosbuvir/velpatasvir for treatment of all six genotypes of HCV.

The slight slowdown in U.S. HCV sales has led to a sharp pullback in GILD shares since late October. U.S. HCV sales could exceed $3 billion in the fourth quarter but will once again see some slowdown based on my initial estimates. But as I have said before, the slight slowdown in U.S. HCV sales is not a major concern. In the coming quarters, sales in international markets, especially in Japan where Harvoni has just been launched, is expected to pick up. This will offset some of the slowdown in the U.S. sales. The approval of the first TAF-based product has further strengthened Gilead's HIV franchise as well. As I have said before, investors are underestimating the impact of TAF-based products on the HIV franchise.

GILD is currently trading close to $100, which remains an attractive entry point for the stock. With several catalysts coming up in the next few months and sentiment on the biotech sector improving, I expect a rebound.

Merck Provides Update on REVEAL, Reports Data from Phase III Trial of HCV Combo Drug- Merck & Co. (NYSE:MRK) provided an update on its REVEAL outcomes study for anacetrapib. The company said that the Data Monitoring Committee ('DMC) has completed planned review of the unblinded study data and recommended that the study continue without any changes. The 30,000 patient, event-driven study is expected to be completed in early 2017. The study has been sponsored by Oxford University. Merck also announced results from Phase III trial evaluating the safety and efficacy of its HCV combo drug. The Phase III trial called C-EDGE CO-STAR is evaluating the efficacy and safety of once-daily elbasvir/grazoprevir in patients with chronic HCV genotypes 1,4 or 6 infection who inject drugs and are receiving opioid agonist therapy. The results showed that 95% of the patients treated with the combo drug for 12 weeks achieved sustained virologic response 12 weeks after the completion of the treatment.

AbbVie Reports New Data on Viekira Pak, Submits IMBRUVICA sNDA- AbbVie (NYSE:ABBV) announced new data from its Phase IIIb TOPAZ-II study evaluating Viekira Pak(NYSE:R) with or without ribavirin in adult patients with genotype 1a or genotype 1b chronic HCV infection. The results show that 95% of the patients in the trial achieved sustained virologic response at 12 weeks post-treatment after 12 or 24 weeks of treatment. AbbVie also announced that it has submitted a supplemental New Drug Application ('sNDA) to the FDA to update IMBRUVICA label to include Phase III HELIOS study data. The Phase III study evaluated IMBRUVICA plus bendamustine and rituximab ('BR) versus placebo plus BR in relapsed/refractory chronic lymphocytic leukemia ('CLL) or small lymphocytic lymphoma.

Baxalta Gets Two Regulatory Approvals- Baxalta (NYSE:BXLT) announced that its OBIZUR has been granted Marketing Authorization by the European Commission for the treatment of adult patients with acquired hemophilia A. The approval was based on positive results from mute-centre Phase II/III open-label clinical trial that evaluated the safety and efficacy of OBIZUR in the treatment of serious bleeding episodes in adults with acquired hemophilia A. Baxalta's Adynovate for use in adults and adolescents aged 12 years and older, who have hemophilia A was approved by the FDA. Adynovate has been approved for on-demand treatment and control of bleeding episodes and to reduce the frequency of bleeding...