(By Ohad Hammer) Gilead (GILD) is garnering a huge amount of attention from investors owing to the hepatitis C virus (HCV) pipeline it got from the Pharmasset acquisition. As the market is occupied with the company's HCV programs, investors seem to ignore additional promising assets in Gilead's pipeline. GS-1101, which started phase III in leukemia last week, is a good example. I have no intention to downplay Gilead's HCV pipeline, however, the minimal attention given to GS-1101, one of the promising hematology agents in development, seems unjustified.
Another multi-billion opportunity
Gilead got GS-1101 through the $600M ($375M in cash+ $225M in milestone payments) acquisition of Calistoga last year. At the time, the drug generated preliminary but exciting results in various blood cancers, positioning it as one of the big promises in the industry. The medical community was taken by GS-1101 as a highly effective, safe oral drug. It is viewed as the main competitor to Pharmacyclics' (PCYC) closely watched Ibrutinib (formerly PCI-32765).
From a market potential perspective, GS-1101 is targeting a market which is at least as big as the HCV market (the best benchmark is Rituxan with $6B in sales last year) but with some advantages. The business case for GS-7977 in HCV will heavily depend on diagnosing patients who do not even know they are sick and convincing them to get treatment. In contrast, leukemia or lymphoma patients are well aware of their condition and most importantly, do not need to be convinced to get treated.
GS-1101's main disadvantage is the lack of meaningful clinical data for over a year in bright contrast to Pharmacyclics that is constantly releasing more promising results. This, combined with a slightly inferior safety profile, makes Pharmacyclics' ibrutinib the more preferred drug. Still, as both drugs are still at an early stage, it is hard to tell how they perform when they reach the market.
Immuno-kinase inhibitors as a strategic area
Just as Gilead identified the focal point in HCV with the Pharmasset acquisition, it identified one of the most promising areas in the hematology and autoimmune diseases. GS-1101 inhibits a specific subtype of PI3 kinase (delta isoform). This target belongs to a group of kinases that are pivotal in the function of immune cells, referred to as "immune-kinases".
There are currently 4 hot immune-kinase targets: Jak, Syk, Btk and PI3K-gamma/delta. Drugs for each of the 4 targets have already demonstrated remarkable activity across many indications, usually with a superb safety profile and convenient oral dosing. As a result, these drugs are expected to become central players in indications representing tens of billions of dollars in commercial opportunity.
The initial markets for Jak inhibitors are myelo-proliferative diseases such as myelofibrosis (MF) and rheumatoid arthritis (RA), the initial market for Syk inhibitors is RA.