San Francisco Chronicle - The Voice of the West, 901 Mission Street, San Francisco, CA 94119 - Thursday, August 1, 1996 - Page E1
Carl T. Hall, Chronicle Staff Writer

London-based Glaxo Wellcome Plc has emerged as the clear corporate winner among the major pharmaceutical makers battling for a slice of the booming market for AIDS anti-virals. The drug giant yesterday reported stronger-than-expected sales during the first half of this year, partly because of higher sales of two key AIDS drugs. That's despite weak results for its flagship ulcer drug Zantac. The latest clinical studies show a promising new role for Glaxo's AZT, the original anti-viral weapon against HIV, when used in combination with other drugs, including Glaxo's 3TC.

Trends point to drug treatments starting early and continuing indefinitely for many of those infected with HIV. As a result, some industry leaders expect the number of people on anti-viral therapy to soar from about 220,000 now to 900,000 during the next 10 years, even if the number of total infections stays constant.

"Glaxo is in a very good position right now," said Jack Lamberton, a drug-industry analyst at Natwest Securities in New York. "All the recent advances in AIDS therapy benefit Glaxo."

AZT, sold under the trade name Retrovir, has been on the market since 1987. Sales peaked in 1992 at $388 million worldwide, plummeting to $317 million last year after the drug proved to be no match for the AIDS virus when administered by itself.

But the advent of combination therapy "has brought new life to AZT," said Edmund Debler, analyst at Mehta & Isaly, a New York investment firm.

AZT sales jumped to $195.8 million during the first six months of this year, up 28 percent from the same period in 1995, Glaxo reported yesterday. If the pace continues, sales for all of 1996 would surpass the peak set four years ago.

Already, AZT and 3TC are said to account for roughly 70 percent of all AIDS prescriptions written in the United States.

Researchers even had to halt a major trial of AZT and 3TC earlier this month because the combination appeared to be working so well. Doctors decided that a control group of patients, most of whom were being given only AZT, should be given immediate access to both drugs.

Researchers continue experimenting with various combinations to find just the right drug cocktail for particular patients. But the Glaxo drugs seem to be part of nearly everyone's mix.

By the company's own count, the AZT- 3TC combination serves as the "foundation" in 11 clinical trials now under way.

Much of the recent excitement in AIDS treatment has focused on a new class of anti-virals called protease inhibitors. The first versions were introduced to the U.S. market by Merck & Co., Hoffman-La Roche and Abbott Laboratories.

Glaxo has yet to field an entry. However, the company has what it describes as a second-generation protease inhibitor in the development stage through a partnership with Cambridge, Mass.-based Vertex Pharmaceuticals Inc.

It's too soon to predict how well the Glaxo-Vertex protease inhibitor, known as VX-478, might fare. Assuming no major disappointments in the development plan, the drug is still at least a year away from Food and Drug Administration approval.

Still, analysts speculate Glaxo might end up as the only major drugmaker offering a full array of AIDS therapies.

"Glaxo becomes a one-stop shop for AIDS," Debler said.

In the best-case scenario, successful treatment during the early stages of HIV infection will translate into fewer cases of full-blown AIDS. That would mean a shrinking market for drugs aimed at opportunistic infections common in late- stage AIDS patients.

There already are some hints of a shift. Health authorities in at least two states, New York and Illinois, have stopped paying for many other AIDS drugs in order to devote more resources to the high-priced anti-viral therapies.

But Glaxo won't be the only drugmaker to reap the rewards.

The ability of the AIDS virus to rapidly mutate into resistant strains suggests doctors will have to choose carefully from a growing array of treatments. Bristol- Myers Squibb, for example, offers drugs in the same class as Glaxo's that appear to offer some medical advantages to some patients.

"Each drug will have a role to play," said Dr. M. Nixon Ellis, a Glaxo Wellcome alumnus who is now president of Triangle Pharmaceuticals, a North Carolina drug- discovery company. "You won't see the classic `my-drug's-better-than-your-drug' kind of competition."

REBOUND FOR AZT

Annual sales of Retrovir (AZT): Year Sales (Mills $)

1987 $ 25 1988 158 1989 225 1990 286 1991 315 1992 388 1993 379 1994 317 1995 317 1996 392*

Annualized, based on first six months. Source: Glaxo Wellcome, Chronicle research
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