Important note: Information in this article was accurate in 1999. The state of the art may have changed since the publication date.

Reuters NewMedia - Tuesday, November 2, 1999

Shares of Gilead were down 14-3/16 at 49 in heavy volume of more than 12 million shares, making it one of the largest percentage losers on the Nasdaq. The move is a slight rebound from a day low of 40.

Late Monday, the U.S. Food and Drug Administration advisory panel voted 13-1 against recommending that the FDA approve adefovir for use in drug cocktails to suppress HIV levels.

The panel said Gilead did not provide enough data to show adefovir was safe and effective at the recommended dose. The FDA usually follows its panel's advice. The rejection was a setback for Gilead, which has yet to make a profit and is trying to bolster its HIV franchise. The news led to at least one downgrade from an investment firm and several cuts in earnings estimates by other firms early on Tuesday.

"We believe there is little chance that the FDA will ultimately approve adefovir for HIV. Without adefovir, profitability may be delayed up to twelve months," said Elise Wang, an analyst at PaineWebber.

Wang cut her 12-month price target for Gilead to $55 from $65 and reduced estimates for 2002 -- the first full year when she expects profitability -- to about $2.30 per share from $3.75.

Also Tuesday, Donaldson, Lufkin & Jenrette downgraded Gilead to market perform from buy.

Adefovir is the first in a new class of drugs called nucleotides, which help reduce the virus by priming cells to fight infection. The drug's main drawback was that it caused kidney toxicity which caused researchers to cut the dose in half near the end of the studies, which gave them only a small pool of patients who took the new recommended dose of 60 milligrams.

Gilead, which co-developed the just-approved flu pill Tamiflu and sells an anti-fungal remedy and two drugs for AIDS complications, is also developing another nucleotide, tenofovir.

With adefovir's future uncertain, Gilead may turn its focus toward tenofovir, which is currently in Phase II studies, Wang said.

One analyst, however, described the market's reaction to the news as "overkill." Jason Dougherty, analyst at Warburg Dillon Read, said he estimated peak sales for adefovir in treating AIDS at $75 million.

He said the drug had far bigger commercial potential -- "blockbuster potential" -- as a possible treatment for Hepatitis B. He added that clinical trials for that indication are now underway.

Dougherty said adefovir is being tested in a much lower dose for Hepatitis B, a fact which could reduce the likelihood of toxicity becoming a big problem.
9911
RE991102

Always watch for outdated information. This article first appeared in 1999. This material is designed to support, not replace, the relationship that exists between you and your doctor.

AEGiS presents published material, reprinted with permission and neither endorses nor opposes any material. All information contained on this website, including information relating to health conditions, products, and treatments, is for informational purposes only. It is often presented in summary or aggregate form. It is not meant to be a substitute for the advice provided by your own physician or other medical professionals. Always discuss treatment options with a doctor who specializes in treating HIV.

Copyright ©1980, 1999. AEGiS. All materials appearing on AEGiS are protected by copyright as a collective work or compilation under U.S. copyright and other laws and are the property of AEGiS, or the party credited as the provider of the content. .