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Gilead (GILD) Needs More Options in Hep B, Says RBC (TKMR) (ASMB)

May 27, 2015 10:47 AM EDT
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Gilead Sciences (NASDAQ: GILD) will need to increase investment in Hep B, said RBC analyst Michael J. Yee, and it may be tracking players Tekmira Pharma (NASDAQ: TKMR) and Assembly Biosciences (NASDAQ: ASMB). Comments follow disappointing results earlier from partner GlobeImmune (NASDAQ: GBIM).

"GS-4774 in partnership with GBIM for Hep B missed the Phase II primary endpoint of S-antigen reduction at 24 weeks. The good news with this Tcell activating drug is some slight evidence of a dose response and better effect over longer period of time - but in our view it's not impressive enough and GILD will need more options. Their 2nd program GS-9620 in Phase II is interesting (inside details) but we also think this won't be enough and down the road we predict GILD will have to do more deals in this space and is probably watching/tracking two leading albeit early players in Hep B: TKMR and ASMB," said Yee.

"We've been saying Hep B has the potential to be a very significant market opportunity long-term - possibly similar in size to Hep C. However, Hep B is more difficult to cure than Hep C. Thus, GILD is working in this space and we believe - has an active screening program to find oral small molecules against the critical cccDNA but these are all very early-stage and not in the clinic. Other players like TKMR/OnCore have leadership from Pharmasset and are working on least 6-7 different oral programs in pre-clinical and one will enter the clinic by YE:15. ASMB is another public company with leadership from GILD and multiple interesting preclinical programs targeting core protein - a key player involved in multiple steps inhibiting cccDNA and the capsid encapsulating the virus. JNJ just publicly commented at their biopharma day they are also seeking HBV drugs against cccDNA but probably 1-2 years from giving more detail," added the analyst.



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