Gilead Sciences (GILD), the world's biggest maker of HIV medicines, rose to its highest stock price in 20 years after a combination of its experimental hepatitis C therapies cleared the virus in all of the patients in a trial.
Gilead gained 13.7 percent to close at $73.93 in Monday's trading after presenting clinical trial results over the weekend at a meeting of the American Association for the Study of Liver Diseases in Boston.
Foster City-based Gilead is among several drugmakers racing to develop hepatitis C drugs that act faster with fewer side effects than the current standard of care. Shares of Achillion Pharmaceuticals and Vertex Pharmaceuticals, other developers of hepatitis C therapies, dropped on the news.
Gilead spent about $10.8 billion in January to acquire one of its medicines, GS-7977, known as sofosbuvir. The company combined it with GS-5885 as well as the antiviral ribavirin and gave it to 25 patients for 12 weeks. All of the patients, who hadn't received previous treatments, had undetectable levels of the virus four weeks after they stopped taking the therapies, Gilead said in a Nov. 10 statement.
"This is starting to look like a home run as we now know Gilead at least has a 100 percent cure all-oral regimen with its own wholly owned drug with no partnering," Michael Yee, an RBC Capital Markets analyst in San Francisco, wrote in a note to clients.
Gilead has begun testing the combination without ribavirin in the third of three trials typically required for U.S. regulatory approval.
"This was the key datapoint that the street was waiting for," Mark Schoenebaum, an analyst with ISI Group in New York, wrote in a note to clients.
In addition to Vertex and Merck, Gilead is competing with Abbott Laboratories, Bristol-Myers Squibb and Johnson & Johnson to develop a new generation of hepatitis C treatments. Rising deaths among baby boomers from the disease prompted U.S. health officials to declare in May that the entire age group is at risk and should be tested.